Taxable Income: Moving profits from your property improvements or lighting LLCs into the real estate LLC doesn’t change your overall taxable income.

Dell Technologies Inc. is planning a $25 million expansion over the next five years at its Round Rock headquarters.That was disclosed by Round Rock Chamber officials during an Aug. 28 meeting as the Round Rock City Council unanimously voted to approve nominating Dell (Nasdaq: DELL) at its HQ at 1 Dell Way as a qualified enterprise project as part of the Texas Enterprise Zone Program.Dell is planning $25 million in real property and business personal property improvements at the site over the next five years, consisting of expansion, new construction and renovation.

You’re really limiting your chances of a faceplant. 

It also improved refinance options down the line, making it easier to pull capital back out for the next deal.It’s a reminder that appraisals aren’t just another box to check for the bank.

Those that deal with the 12 1/2 % remaining have a chance for much better success OVER THE LONG TERM, in all economic environments.  

Don’t do it just to do it.If the duplex doesn’t actually improve your cash flow, your risk-adjusted return, or your long-term strategy, then the 1031 isn’t worth it right now.

If that’s off, even by a little, it can snowball over time and make things really messy and eventually cost you more money when you do decide to work with a CPA or if you sell down the road.One option you could try if you're not sure is having a CPA handle just that first year to get everything set up correctly (basis, depreciation schedules, categorizing repairs vs. improvements, etc.).

Or, if you think there is room for improvement, you can hire a specialized bookkeeper who will bring you into their processes.Happy to discuss further. 

Look at reverse or improvement exchanges.If you need to buy first or make improvements, a properly structured reverse exchange (using an accommodation titleholder) or improvement exchange can keep you inside 1031 while solving sequencing issues.

The adjusted cost basis would be your purchase price, plus capital improvements, minus depreciation, like what @Josh St Laurent said.