SBTS
Level 3

Hello:

I am working on a reverse 1031 exchange involving multiple properties for Form 1065.  Here is the situation:

Client purchased two properties in October 2020 and started a reverse 1031 exchange -- buy first and then sell.

Client then sold three properties to complete the reverse 1031 exchange: Sold the first property in November 2020; and then sold the second and third properties in March 2021. 

Exchange closed in March 2021.

The 45-day identification period and the 180-closing dates are all within the rules.

Since the gain from the sale of the first property (Nov 2020) will be deferred but since the exchange closed in 2021, how to:

(a) record the disposition of asset; and
(b) stop the depreciation in 2020.

Your guidance would be appreciated.  

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