Hello, has anyone had a 1031 exchange transaction where the property is sold in one year and replacement property is purchased following year?  Also, at closing they had construction funds paid out.  Here is the scenerio:

Relinquished property cost basis is 1,473,155.27 and sold for 2,600,000 on 9/9/22 this property had a mortgage the seller turned around and paid down the mortgage with 1,400,000 of sales proceeds. Closing cost of 142,967.63 were also paid with the proceeds.  The 1031 exchange company held 1,057,032.37 until replacement property was purchased in 2/22/23.  Replacement property sales price is  425,000. Along with the purchase there were disbursements in the amount of 440,582 for improvement on this new replacement property.  Closing cost of 959.  At closing there were 190,491.37 paid back in cash to the seller in this case now the buyer.

What i am trying to figure out is how would i recognize the construction disbursement for the improvements for the property would i include this with the new replacement cost of the property.  My calculations show that total boot would be 1,590,491.37 (1,400,000+190,491.37).  I have entered this information into lacerte but I am not sure if i have done this correctly.

Thank you,

Maria Duran