thanks a lot for your reply and anytime you spent on this,  it is not really a citation,  etc I was looking for, but THANK YOU.  2 people dissed you on your reply.  always several  snotty  people out here who criticize Every Question.  

thanks So Very Much,  SJR and ABCTAX,  I guess I am quite surprised Lacerte support did not see this, as I sent them a copy of the return.  she spent  15 minutes on this.  By god, I am still in the process of memorizing  the  50,000 pages of THE CODE.  when I get there, I won't be making any more errors. Truly, I learn something new out here every week. Really appreciate you

obviously, he did not do an exchange, but his LAWYER/EXCHANGE FACILITAOR says he did. Form 8824 line 18, just entering the items shown on Lacerte and also the form, do not seem to be complete.  what should I put on line 18?  Here is exactly what our Esteemed  Barrister wrote:   " sells property that has a 900,000 mortgage, but only a 500,000 basis on it for 1,000,000 and receiving 100K in net proceeds.  Then pays 100 K to buy replacement property for 100k, . 100 k of the capital gain from first property is deferred to 2nd property, the rest of the capital gain is taxed"     Then he continues " however if our guy used the  entire 100 K for the down payment on a 500,000 property, and financed the remaining 400K of the purchase price, then the entire capital gain is deferred onto the new property, (which will then have a cost basis of zero)"