Discussion:Cost segmentation / Segregation / Section 1031 Exchange...
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| Revision as of 21:11, 5 August 2008 Kevinh5 (Talk | contribs) ← Previous diff |
Revision as of 21:15, 5 August 2008 Neil Mink (Talk | contribs) (Kevinh5, thank y) Next diff → |
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| the bad news is that he probably woulnd't have had boot without the cost segregation study.}} | the bad news is that he probably woulnd't have had boot without the cost segregation study.}} | ||
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| + | {{ForumReplyPost|UserID=Neil Mink|Date=5 August 2008|Text=Kevinh5, thank you for your thoughts. I agree with what you said about Circular 230. In this case I'm saying to not use the cost segmentation data because there is no rule that says you have to segment costs. I would just depreciate the building over 39 years. Or are you saying that I am now locked into to using the cost segmentation since it was done?}} | ||
Revision as of 21:15, 5 August 2008
Discussion Forum Index --> Basic Tax Questions --> Cost segmentation / Segregation / Section 1031 Exchange...
Discussion Forum Index --> Tax Questions --> Cost segmentation / Segregation / Section 1031 Exchange...
| 5 August 2008 | |
| A new client showed up today and told me they had executed a Section 1031 exchange. On the face it appeared as if the transaction was handled properly. However, as we were closing they mentioned that after the fact they had a cost segmentation study done on the replacement property (it was a commercial building and land). Am I way off base here or would this nullify the intent of the 1031 exchange? The exchange was building and land for building and land--and to me by doing cost segmentation you are saying that a portion of the "building" is 5-year and 7-year property. Anyone ever run into this before? I'm wondering if we should just ignore the cost segmentation study at this point. | |
| 5 August 2008 | |
| as a CPA I don't think that Circular 230 allows you to ignore the implication of information furnished by the client.
You have to separate the 1031 out into parts: like kind for like kind. thus you may have 7 or 8 1031's - assuming he had §1245 property relinquished | |
| 5 August 2008 | |
| the good news is that his cost segregation study surely allows a faster write off of the boot than he would have had without it.
the bad news is that he probably woulnd't have had boot without the cost segregation study. | |
| 5 August 2008 | |
| Kevinh5, thank you for your thoughts. I agree with what you said about Circular 230. In this case I'm saying to not use the cost segmentation data because there is no rule that says you have to segment costs. I would just depreciate the building over 39 years. Or are you saying that I am now locked into to using the cost segmentation since it was done? | |
