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R. Klein, EA
R. Klein, EA, Enrolled Agent
Category: Capital Gains and Losses
Satisfied Customers: 263
Experience:  Over 20 Years experience in resolving tough tax cases
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I have sold my rental property for $410,000. I have found a

Customer Question

I have sold my rental property for $410,000. I have found a property that I want to exchange but the price is $300,000.
So on Form 593-C I checked Part III Box 11. To fix the rental I incurred construction fees that were $80,000, as it was trashed. Realtor fees were $25,000.
Now, I need to know did I check the correct box or should I check Part II Box 3, which refers me to form 593-E? Does this apply to my situation or not or can you guide me further...
Submitted: 1 year ago.
Category: Capital Gains and Losses
Expert:  Mark Taylor replied 1 year ago.

Hi, my name is Mark. I will be happy to help you with your questions.

Customer: replied 1 year ago.
Expert:  Mark Taylor replied 1 year ago.

It looks like you are setting up a 1031 exchange. There are specific steps that need to be followed involving a qualified intermediary.

Expert:  Mark Taylor replied 1 year ago.

Box 11 would be check if you are entering a 1031 Exchange. The $80,000 of construction fees would be added to the basis of the property. This would be added to your adjusted basis and reduce any potential gain. The realtor fees and other selling costs would also reduce any gain.

Customer: replied 1 year ago.
I would actually prefer to speak to you. However, am up at 3am Can you please call me tomorrow nite at 8 pm. (###) ###-#### thank you
Expert:  Mark Taylor replied 1 year ago.

What time zone are you in?