Question regarding cost segregation doing a 1031 exchange into a DST
Let me first say I do have a CPA he is buried right now as are most tax professionals. I should've asked this question during the off-season. I like to give him as much information as possible than cross check his return with TurboTax.
I did a 1031 exchange from a rental property into a DST. The DST has cost segregation. Normally, I determine the basis in the new property by subtracting the old mortgage from the new mortgage and then adding in certain costs such as Exchange fee that occurred outside the closing.
This property has cost segregation 70% building 6% land improvement 24%
I have two questions
Question 1 I am determining my basis in the new property by:
1. subtracting the old mortgage from the new mortgage
2. adding Exchange fee, consulting fee and rebated commission back onto the basis
Example figures new adjusted basis =$210,000- land ($10000 adjusted) =$200,000
depreciate as follows 70% x 200,000 = $140,000(27.5yr) 6% x 200,000 = $12,000(15yr) 24% x 200,000 = $48,000(5yr)
question two I received the substitute grantor letter back from the which shows rent income but does not account for distributions
are the distributions I receive taxable income on top of the rent income on the grantor letter?