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- Re: Why is the 8824 generating boot when the buyers had to add money into the purchase?
Why is the 8824 generating boot when the buyers had to add money into the purchase?
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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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1 Comment 1
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)
