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I am trying to record a 1031 Exchange. the original property

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Hi, I am trying...
Hi, I am trying to record a 1031 Exchange. the original property sold for $500,000. Only $300,000. is being used for the 1031 exchange. New property purchased was for $250,000. I have Gain on Sales of original asset is 470,000. How do I adjust out the Exchange amount ($300,000) from my Gain on Sale (Equity account) of $470,000. What kind of account do I use?
JA: The Accountant will know how to help. Is there anything else the Accountant should be aware of?
Customer: Can yo help me figure out what journal entry to make?
Submitted: 1 year ago.Category: Tax
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Answered in 1 minute by:
7/20/2016
Tax Professional: Mark Taylor, Certified Public Accountant (CPA) replied 1 year ago
Mark Taylor
Mark Taylor, Certified Public Accountant (CPA)
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Hi, my name is Mark. I would be happy to help you with your questions.

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Tax Professional: Mark Taylor, Certified Public Accountant (CPA) replied 1 year ago

So you sold a property for $500,000 and had a $470,000 gain?

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Tax Professional: Mark Taylor, Certified Public Accountant (CPA) replied 1 year ago

So based on a quick analysis you have a deferred gain of $220,000.

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Tax Professional: Mark Taylor, Certified Public Accountant (CPA) replied 1 year ago

The deferred gain would be a liability on the balance sheet.

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Tax Professional: Mark Taylor, Certified Public Accountant (CPA) replied 1 year ago

Your basis of $30,000 essentially carried forward to the replacement property.

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