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Back to Table of Contents 1031 BASIS ALLOCATION WORKSHEET Replacement Property Depreciation Analysis (Supplement to 1031 Recapitulation Worksheet Form 354) Back to at, DATE:, 20, Table of Contents

How to fill out 1031 basis allocation worksheet

How to fill out 1031 basis allocation worksheet:

1. Gather all necessary information: Start by collecting all the relevant documents and information related to your 1031 exchange. This includes the original cost basis of the relinquished property, any improvements made to the property, depreciation taken, and any other relevant details.
2. Understand the purpose of the worksheet: The 1031 basis allocation worksheet is used to allocate the cost basis and accumulated depreciation from the relinquished property to the replacement property in a 1031 exchange. It helps in determining the taxable gain or loss on the exchange.
3. Enter the basic property information: Begin by entering the essential details of both the relinquished and replacement properties in the respective sections of the worksheet. This includes the property addresses, dates of acquisition, and other relevant identifiers.
4. Calculate the adjusted basis of the relinquished property: Determine the adjusted basis of the relinquished property by adding the original cost basis to any improvements made and subtracting any depreciation taken. Enter this value in the appropriate field of the worksheet.
5. Allocate the basis and depreciation: Now, allocate the adjusted basis of the relinquished property between land and improvements, as well as between personal and real property, if applicable. Additionally, allocate any accumulated depreciation that needs to be assigned to the replacement property.
6. Determine the basis of the replacement property: To calculate the basis of the replacement property, subtract any liabilities assumed from the adjusted basis of the relinquished property. This will give you the basis you can carry forward to your replacement property.
7. Review and seek professional assistance if needed: Double-check all calculations, ensure that all necessary information has been provided accurately, and review the completed worksheet. If you have any doubts or concerns, it is always advisable to consult a tax professional or a qualified intermediary for guidance.

Who needs 1031 basis allocation worksheet:

1. Real estate investors: Individuals, partnerships, corporations, or any entity engaging in a 1031 exchange of real property will typically require a 1031 basis allocation worksheet. This includes those looking to defer capital gains tax through a like-kind exchange.
2. Property owners looking to upgrade or diversify their portfolio: If you are planning to sell your existing investment property and reinvest in a different property to enhance your portfolio or diversify your holdings, you may need to utilize a 1031 basis allocation worksheet.
3. Tax professionals and qualified intermediaries: Tax professionals and qualified intermediaries play a crucial role in guiding clients through the intricacies of a 1031 exchange. They often assist in the preparation and completion of the 1031 basis allocation worksheet to ensure compliance with IRS regulations.

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What is 1031 basis allocation worksheet?

The 1031 basis allocation worksheet is a document used to allocate the adjusted basis of a relinquished property to one or more replacement properties in a 1031 exchange.

Who is required to file 1031 basis allocation worksheet?

Taxpayers who are completing a 1031 exchange are required to file the 1031 basis allocation worksheet.

How to fill out 1031 basis allocation worksheet?

The 1031 basis allocation worksheet should be filled out by listing the adjusted basis of the relinquished property and allocating it to the replacement properties based on their fair market values.

What is the purpose of 1031 basis allocation worksheet?

The purpose of the 1031 basis allocation worksheet is to properly allocate the adjusted basis of the relinquished property to the replacement properties in order to calculate the taxable gain or loss in a 1031 exchange.

What information must be reported on 1031 basis allocation worksheet?

The 1031 basis allocation worksheet must report the adjusted basis of the relinquished property, the fair market values of the replacement properties, and the allocation of the basis to each replacement property.