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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
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Experience:  10 years experience
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If I do a partial 1031 exchange coupled with an installment

Customer Question

If I do a partial 1031 exchange coupled with an installment sale, how do I treat the depreciation recapture. I sold a building for $1,000,000. Buyer put $600,000 down and I carried a note for $400,000 @6% interest only for 5 years. Purchased property for $620,000. Depreciation recapture is 132,000. Can the depreciation recapture be rolled into the partial exchange, either fully or partially, or must I pay the taxes as ordinary income on the depreciation since it was not a full 1031. Also, how do I report a partial exchange on the 8824.. Darrell
Submitted: 5 years ago.
Category: Tax
Expert:  MequonCPA replied 5 years ago.
Hi and welcome to JustAnswer:

Has the sale closed?

Is the depreciation recapture on real estate taxable at the higher capital gains rates.