gsa11
Level 3
10-10-2022
06:31 PM
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I am completing the 8824 for a 1031 exchange of a rental property. FMV of new property is $1 million. New loan is $700K. 1031 intermediary put in $300K cash. Clients had to contribute an additional $15K for closing costs.
Old property sold for $950K. Selling expenses were $45K. Old mortgage payoff at closing was $600K. It was originally bought for $780K and has had $55K in depreciation taken.
Proseries says that the client must have received $50K cash/boot.
$1mil - 700k = 300k
$950K-600K = 350K, net difference is $50K cash received
What am I missing?
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Terry53029
Level 14
10-12-2022
08:30 AM
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Probably because your client is receiving $50K equity (new property $1,000,000 - $700,000 mtg = 300K. property given up $950,000 - $600,000 = $350k)