All Forum Posts by: Crystal Mellor

 Thank you Aaron!  

 Thank you for the welcome!  I'm happy to have discovered this!!

Hi! I sold a paid off duplex Nov 1, 2024.  Half was owner occupied and qualified for the 121 exclusion, pretty clear cut so we don't need to worry about that part.  The other half was intended to do a 1031 exchange.  I identified the replacement property within the 45 days, had an inspection and appraisal but just before closing I found out one unit had squatters and I didn't want to take that on so the deal fell apart and the qualified intermediary released the 1031 funds to me the day after tax day, April 17, 2025.  Since the 1031 straddled 2 years, I will owe for the 2025 tax year.  I bought this (half of a duplex) in 2005 for $112k and sold it for $242k and the amount of the 1031 funds after all fees was $220k.  My tax guy says I'm looking at a total tax bill of ~$47k, saying I have a recapture of $112K and a capital gain of $80k.  A) does this sound right?  B)  What can I do to offset the recapture, which is being taxed at my marginal rate of 24% since I have a w2 job.  C)  If I buy another property this year and do a cost seg to speed up depreciation, will the depreciation on that property offset the recapture on the other?  Thanks so much in advance!!