These properties were exchange properties from a 1031 transaction several years ago.

In exchange, they let you take over their mortgage debt and you take over ownership of the property.

Also if owned outside qualified accounts, that depreciation would defer income, in fact, if you consider a 1031 (available to direct owners, not so much to me in syndictions) you can keep exchanging and your heirs get a step-up in basis; the tax on the gain is never collected.

It is currently on the market and we are working with a qualified intermediary  for a 1031 Exchange and looking for financing for two to three new properties to buy and hold for the children and their children and beyond. 

After a few exchanges this afternoon, she’s said to be working on my request (as if the request is new and isn’t 45+ days old).

It might not be as precise as your method, but it could give you a good starting point without the data headache.

Hey Steven, Generally homes such as yours that may fall into the "fix and flip" category do not meet the qualified use regulations for 1031 exchanges.

For example, in 2024 if married filing jointly see table below.You could also do a 1031 exchange to avoid the taxes completely but have to invest all money into a like kind property of higher value. 

Anybody have some sample wording for a seller carry back mortgage note that is held inside of a tax deferred exchange? 

You're likely better off selling it and doing a 1031 exchange into another property.