Discussion:1031 Exchange-different states

From TaxAlmanac, A Free Online Resource for Tax Professionals
Note: You are using this website at your own risk, subject to our Disclaimer and Website Use and Contribution Terms.

From TaxAlmanac

Jump to: navigation, search

Discussion Forum Index --> Tax Questions --> 1031 Exchange-different states


GJBoweEA (talk|edits) said:

3 April 2007
Here is the simplified scenario: taxpayer is a CA resident and has CA property with basis of $500,000 and FMV of $800,000. Exchanges into 2 properties each with FMV of $400,000, one in CO the other in OH. For Fed & resident state (CA) the taxpayer has the 2 new properties with the reduced basis of $250,000 each.

The taxpayer has never had any tax reporting with either CO or OH in the past. My question is, what it the tax basis of the newly acquired property for state tax purposes for the states of CO and OH. Do they have to use the reduced basis, although they have never gotten any benefit from the tax deferral? Or do they get a "fresh start" at the actual cost of acquisition?

Kevinh5 (talk|edits) said:

3 April 2007
Discussion:1031 Basis Out of state - Different state

Kevinh5 (talk|edits) said:

3 April 2007
Discussion:Arizona 1031 exchange

GJBoweEA (talk|edits) said:

3 April 2007
Thanks, read both of those, but didn't really answer the question. In the meantime, working through the OH & CO returns, it appears that neither have any provision of state adjustments to Fed rental schedules. There is just the allocation as to which properties are sourced to that state. My inference is that OH & CO conform to Fed on all rules related to rental and depreciation. There appears to be no opportunity for basis differences between Fed and state.

JAD (talk|edits) said:

3 April 2007
I have same situation. California taxpayer exchanged into Colorado property. I have spoken several times w/ CO Tax Practitioner's Hotline. 303-232-2419. I don't have cites for you, but there's a man whose name I don't want to post here who seems very knowledgeable who has reassured me several times that CO starts with the federal numbers. (I have called several times, first w/ the basis issue, then with questions about the passive carryovers, and then with their treatment of the disposition of the property) It's not all messed up like the CA laws. I don't know about Ohio. If you want the man's name, let me know and I will pass it on but not on the public screen.

To join in on this discussion, you must first log in.
Personal tools