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Originally Posted by mheights Thank you Wnhough.
It looks like there is a 180 day period for completing the transaction to be eligible for like kind exchange. While I entered into an agreement in 2014, I am getting the apartments in 2016 after about 2 years. Would I still be eligible for the exchange?
Assuming I am eligible for the exchange and if I sell the apartments, what would be the cost basis? Is is cost of the land when I purchased it or FMV of the apartments on the date when I get them? I will work with a CPA but just wanted to understand a little bit on like kind exchange. Thanks, |
It looks like there is a 180 day period for completing the transaction to be eligible for like kind exchange. While I entered into an agreement in 2014, I am getting the apartments in 2016 after about 2 years. Would I still be eligible for the exchange?==>> I think so;the 45-Day Identification Period begins with the closing of the relinquished property and requires the identification of like-kind replacement property. The 180-Day Exchange Period runs concurrently with the 45-Day Identification Period and requires the acquisition of all desired identified replacement properties. Signing an Agreement of Sale is not sufficient. youmust actually take legal and equitable ownership of the replacement property on or before the 180th day, but you di d notyet take take legal and equitable ownership of the replacement property
Assuming I am eligible for the exchange and if I sell the apartments, what would be the cost basis? Is is cost of the land when I purchased it or FMV of the apartments on the date when I get them? =====>>NEEDLESS TO SAY,
to decide if you want to do a like-kind exchange of your land, you should determine how much capital gain you will have to pay tax on if you sell the property and do not do an exchange. To determine it, you need to know your current adjusted tax basis in the pty., i mean your orginal purchase price plus other costs that you spent after the purchase of the piece of land
The first step is to go back and establish the starting basis when you acquired the property.
In a simple purchase the starting basis is what you paid for thepiece of land property plus the costs necessary to acquire the property. Unfortunately, costs to obtain financing (like points) or prepayments for insurance, interest, or taxes are not included
I will work with a CPA but just wanted to understand a little bit on like kind exchange.=>.agreed you also need to provide your cpa with accurate info for accurate return.