Welcome back! Ask questions, get answers, and join our large community of tax professionals.
cancel
Showing results for 
Search instead for 
Did you mean: 

critical diagnostic for a 1031 exchange

Ms CPA
Level 1

I would like to know how to clear this diagnostic for a 1031 exchange when the relinquished property is land and improvements and the new property is a building. The closings were 1 week apart in Feb of 2019. 

"Under the newly enacted “Tax Cuts and Jobs Act”, like kind exchanges completed after December 31, 2017 are limited to exchanges of real property that are not primarily held for resale. A transition rule does provide relief for a transaction if the property given is disposed of, or if the replacement property is received prior to January 1, 2018. Please review the disposition to confirm it qualifies as a like kind exchange under the new law. If not, the disposition should be entered as a normal disposition and not like kind exchange. [ref. #2050609]"

0 Cheers

This discussion has been locked. No new contributions can be made. You may start a new discussion here

1 Solution

Accepted Solutions
sjrcpa
Level 15

If the improvements were real property and it qualifies as a LKE, ignore it.


Ex-AllStar

View solution in original post

2 Comments 2
sjrcpa
Level 15

If the improvements were real property and it qualifies as a LKE, ignore it.


Ex-AllStar
dfa
Level 3

If the relinquished property is pre-1987 then you might need to check the 1250 box. This could be especially important if there is boot involved as the character might be ordinary or long-term gain.

0 Cheers