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Updated almost 3 years ago on . Most recent reply
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tax filing on a failed 1031 crossing tax years
We sold a property july 13 and funds went to a QI as we hoped to do an like kind exchange. We Identified a replacement property August 27 which was day 45. The deal fell through abotu a week later after we had the inspection done. The QI held the funds until January 11. My problem is filing this on my taxes. I thought it would be straightforward as it seems like a common situation. I've always managed my rental property taxes using Turbot ax but it doesn't seem to be handling this correctly. However it may be that I am confusing the software by giving incorrect input as to what to report.
-Do I report this as a like kind Exchange on form 8824 or do I report it as an installment sale on 6252 or does it get reported as both?
-If its just the Installment Sale form that needs to be completed do I include that in my 2021 taxes or just wait until 2022? Or both years?
-What form do I file to explain the 1099-s that is for 2021? (I'd like to defer taxes until 2022 if possible)
-Because there is straight line depreciation on the property I think all the taxes would be deferred because the depreciation is "unrecaptured Sec 1250 GAIN" as opposed to "depreciation recapture". Is my understanding correct?
At this late date I doubt I'm going to find a CPA to get this done before April 15 and I don't want to risk penalties if my assumptions are incorrect. If anyone has any insight to share it would be appreciated.