1031 exchange:
Lease Options
Hello, I have a property I'm looking to sell and have some questions about the 1031 exchange.
The property that I'm looking to sell was originally 71,400.
The selling price will be about $90,000.
I figure about $7,000 for cost of sale.
One of my questions is what is the depreciation amount? How do I figure this? From the 1040?? I don't have any improvements that I can think of. Do you know of any state taxes in AL? I'm currently not living in AL, so I imagine I don't have to pay any. Is this right?
I like the fact that your company is in CO. So I do plan to do business with you. I appreciate your response.
Dear M:
- Your depreciation allowance is an annual allowance. If you do not have a running total then you will have to go back to your tax returns starting with your year of purchase. Looking at your schedule E you then add up all depreciation taken over the years. This is your accumulated depreciation. Subtract the accumulated depreciation from your purchase price to arrive at current basis.
- The general rule is that you must pay tax in the state where the property is sold and then if the state in which you reside has a higher state tax you pay the additional amount to the state where you reside. However, if you do a 1031x then you defer both state and federal taxes.
Steven Hickox
Attorney, President
1031x.com
