Discussion:1031 Boot - Reported on 1099
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Discussion Forum Index --> Advanced Tax Questions --> 1031 Boot - Reported on 1099
Discussion Forum Index --> Tax Questions --> 1031 Boot - Reported on 1099
JohnSanDiego (talk|edits) said: | 5 August 2008 |
| I did a 1031 exchange where my property was sold in late 2005 and replacement purchased in early 2006. The exchange was reported on form 8824 in my 2005 tax return. I received a $25K rebate from the seller of my replacement property (outside of escrow) that was reported by seller on a 1099 for 2006. I reported this amount as "boot" in my calculations on form 8824, however due to the amount of closing costs which offset the boot, it did not result in any taxable gain from the exchange. I provided an explanation of why the 1099 amount was not reported as income on line 21 my 2006 return, so the IRS would not flag my return for unreported income, but I have just received notice from them of the $25K that they consider unreported income.
Is there any reason that my classification of this amount as boot in the exchange would be considered invalid (I used a qualified intermediary and met all time restraints for a delayed exchange)? | |
| 6 August 2008 | |
| The boot you receive in a 1031 exchange is taxable income to you. | |
| 6 August 2008 | |
| Would it be that the income (gain) should have been reported on Schedule D with the "basis" being the closing costs? | |
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