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Ask Lane Your Own Question
Category: Capital Gains and Losses
Satisfied Customers: 12681
Experience:  Have been providing Financial and Tax advice for 30 years.Concentration in Corporations, Estate, Income Tax and Business Planning
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How do you calculate the Capital gains tax on the sale of

Customer Question

How do you calculate the Capital gains tax on the sale of 1031 exchange property
JA: I love the idea of making big money with investments, but there are so many things that could go wrong. The Accountant will be able to help you. Please tell me more, so we can help you best.
Customer: We are selling our income property and have been in a 1031 exchange for over 10 years. I am trying to figure my CGT on the transaaction
JA: Is there anything else the Accountant should be aware of?
Customer: We are not doing another 1031 exchange. This is a buy out
Submitted: 3 months ago.
Category: Capital Gains and Losses
Expert:  Lane replied 3 months ago.

Hi, you'll use your basis from the form 8824 that was done with the original 1031 as the starting point, then adding improvements and subtracting depreciation from that point forward to get to your basis for this sale.


1.Relinquished Property Adjusted Basis ____________2.Plus: Any other Property Transferred+____________3.Plus: Liabilities Assumed by Taxpayer+____________4.Plus: Amount of Cash Paid by Taxpayer+____________5.Plus: Gain Recognized on other Property+____________6.Less: Money or Property Received–____________7.Less: Liabilities assumed by other Party–____________8.Less: Loss Recognized on other Property–____________9.Equals: Basis in Replacement Property=____________
Expert:  Lane replied 3 months ago.

Again, that becomes the basis on the replacement property (the property you're now selling) on day 1... improvements add to, and depreciation reduces from, that basis for this sale.


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I hold a law degree (J.D.), with concentration in Tax Law, Estate law & Corporate law, an MBA in finance, a BBA, and CFP & CRPS (Chartered Retirement Plans Specialist) designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice on three continents since 1986.