All Forum Posts by: George A.

Thanks Dave. Appreciate your insightful response. George 

Under the instalment sale rule if the 1031 exchange falls towards the end of the taxable year proceeds of the exchange can be taxed the following year. In my case 1031 exchange failed so the mortgage I was carrying on the relinquished property according to my CPA is causing capital gains tax in 2017 and then remaining profit that came out from the 1031 intermediary account will be taxed in 2018 tax year. It's crazy to think that I am getting taxed on the debt and I am hoping experts in the matter may have some resolution in this situation. Thanks

Thanks. 

Hi: To All 1031 Exchange Subject Matter Experts

So, last year I sold an investment property that carried a debt 800k. Since the sale of the property occurred towards the end of the year, in October, the 1031 Exchange was going to receive an Installement Sale treatment and in the event a Like Kind property was not purchased within 180 days the proceeds would have been taxed in 2018. So, I failed to find a replacement property and couple of days ago my CPA shares the news with me that because of the 800k mortgage debt I had on the property I am subject to pay capital gains taxes on the debt? It's hard to comprehend this but appearently there is this mortgage boot event that's causing the taxable event. So, my question to you RE experts in 1031 exchange is, are there any tax strategies to implement post 180 day exchange rule expiration to avoid this mortgage boot tax??  

Thanks in sdvance.