Call for a simple equation for new Basis in 1031 Exchange?

[Buddy Holmes]

How to Calculate new Property Basis in 1031 Exchange

Define terms:

Property sold

P1 = Original Purchase price of property exchanged

TDP1 = Total Improved Property = P1 – LV1

LV1 = land value when purchased

TD1 = total depreciation taken (so TDP1/27.5 per year for SFH)

G1 = Net Sale gain = P2 - P1

D1 = Debt paid off in sale

B1 = Basis of property sold = TDP1-TD1+LV1

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Property bought in 1031 Exchange w/o boot

Deferred Gain  = G1

Deferred Depreciation Recapture = 0.25*TD1

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1031 Requirements: P2 ≥ G1 & D2 ≥ D1

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P2 = Purchase price of property bought

TDP2 = Total Improved Property bought

LV2 = land value of property purchased

D2 = Debt assumed in new purchase

B2 = Calculated Basis of property purchased = ??

Please define new variables if needed.

Help somebody!!

[Eddie L.]

The presentation here has some errors as well. For example, where is P2 ≥ G1 from? P2 should be ≥ the value of the property transferred not the deferred gain of the property transferred. If you sold the property for $1M then the replacement property should be $1M or more. It's probably better to list out a few specific examples like one with no boot no debt, one with boot no debt, one boot yes debt, figure the formula for each of them then list out the if scenarios to apply a formula to each or possibly have one combined formula if that's your end goal.

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