Form 8824, 1031 Exchange, Deferred Gain Amount

3 Replies

On 8824, Line 24, Deferred gain amount.  Is this amount the tax I would have owed if I just sold the property and didn't do a 1031 exchange ((ie. capital gain amount + depreciation recapture) - (closing costs and fees))?   

Right so what I would owe would be the tax liability on the deferred gain. This is what my understanding is. However, my CPA calculated the deferred gain to include the higher priced property I exchanged into.

200k original price.
300k sold price
40k depreciation

Replacement property $400k

Deferred gain amount is $240k. (I did not include fees and commissions to simplify the numbers.)

If I just sold the property I would have paid taxes on 100k gain and 40k depreciation recapture.