Exchange of like home through sale

Forum|Forum|2 years ago
February 18, 2024
3 replies
23 views

My Client sold the house that he inherited form his parents and use the proceeds to purchase two homes. How should I report this like exchange. Which forms should I use? --8824 or ?

FYI: The house was purchase in 1979 for $91,000.00 and sold for $1,180,000.00 in January 2023.

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taxiowa

Level 8

I would use form ? because you can not do a like kind exchange of a personal residence. Or was it used as rental after inheritance. And when was it inherited, because step up might eliminate some of your concerns.

F

fesemaguAuthor

Level 3

It was inherited in 2021, when taxpayer parents passed away. Tax payer and his sister lived there after parents passed away..

taxiowa

Level 8

Then it was a personal residence and you can not do a like kind exchange. So you have a sale of the inherited house and purchase of two new homes.

But as I said you need to ascertain FMV basis on death because that is what you would most likely use as your cost in the sale.

Just-Lisa-Now-

Intuit Community Champion

Doesnt sound like a 1031 exchange, that cant be done with a primary residence....did they bring you paperwork from the 1031 Intermediary company that held the money from the sale and disbursed that money for the purchase of the other homes?

If the money from the sale went directly to your client, this is NOT an exchange.

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