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Tax Basis Calculation services provide accurate calculation of carryover basis and deferred gain for 1031 exchange transactions in Fort Worth, TX. Understanding your tax basis in replacement proper...
Tax Basis Calculation services provide accurate calculation of carryover basis and deferred gain for 1031 exchange transactions in Fort Worth, TX. Understanding your tax basis in replacement property is essential for future tax planning and accurate tax return preparation. This service is designed for real estate investors who need professional assistance calculating their new basis in replacement property and understanding the tax implications of their exchange transaction.
Our Tax Basis Calculation services include calculation of carryover basis from relinquished property, adjustment for boot received or given, calculation of deferred gain, and determination of new basis in replacement property. We work with your tax advisor to ensure calculations are accurate and properly documented for tax filing purposes. The service includes explanation of how basis affects future depreciation deductions, capital gains calculations, and potential tax liability upon future sale.
We provide detailed basis calculation worksheets and documentation to support your tax return preparation and IRS Form 8824 filing. Our calculations account for all exchange transaction costs, boot received or given, and any cash added to acquire replacement property. For investors in Fort Worth, TX, Tax Basis Calculation services provide the accurate basis information needed for proper tax reporting and future tax planning related to replacement property ownership and potential future exchanges.
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View serviceIn Fort Worth, TX, your tax basis in replacement property equals your adjusted basis in relinquished property, plus any additional cash or boot given to acquire replacement property, plus any exchange expenses, minus any boot received. This is called carryover basis because you carry over your original basis rather than getting a stepped up basis equal to replacement property purchase price. Your deferred gain equals the difference between relinquished property sales price and your carryover basis, which is not taxed in the current year but carries forward in your basis calculation.
In Fort Worth, TX, identification rules do not directly affect tax basis calculation, but they do affect which replacement properties you can acquire. Your basis calculation is based on the actual replacement property you acquire, not the properties you identified. However, if you identified multiple properties and acquire less than one hundred percent of identified value under the ninety five percent rule, your exchange may be disqualified, affecting your entire basis calculation. Proper identification ensures you can complete the exchange and apply correct basis calculations.
In Fort Worth, TX, boot received reduces your basis in replacement property because it represents taxable proceeds not reinvested. If you receive boot, your basis equals relinquished property basis plus additional cash given, minus boot received. Boot given increases your basis because it represents additional investment beyond exchange proceeds. Boot received is taxable to the extent of realized gain, while boot given is added to basis and not immediately deductible. Our Tax Basis Calculation services help you understand how boot affects your basis and tax liability.
In Fort Worth, TX, your basis in replacement property is typically lower than purchase price because you use carryover basis from your relinquished property rather than cost basis. This is the fundamental tax deferral mechanism of 1031 exchanges. Your deferred gain is preserved in the lower basis, which means you will pay taxes on that gain when you eventually sell the replacement property without another exchange. However, you defer current taxes and can continue exchanging to maintain deferral. Lower basis also means lower depreciation deductions compared to a stepped up basis.
In Fort Worth, TX, your depreciation deductions on replacement property are based on your carryover basis, not the purchase price. This means depreciation deductions are lower than they would be with a stepped up basis equal to purchase price. However, you still get depreciation deductions based on your carryover basis, which helps offset rental income. When you eventually sell, the difference between your carryover basis and replacement property value represents deferred gain that becomes taxable. Our Tax Basis Calculation services help you understand depreciation implications and plan for future tax consequences.
Example of the type of engagement we can handle
Service Type:
Tax Basis Calculation
Location:
Fort Worth, TX
Scope:
Calculate carryover basis and deferred gain for 1031 exchange transaction
Client Situation:
Client completed exchange in Fort Worth, TX, selling commercial property with adjusted basis of $500,000 for $1,000,000 and acquiring replacement property for $1,200,000 with $200,000 additional cash. Needed accurate basis calculation to understand new basis in replacement property, deferred gain, and tax implications for future planning.
Our Approach:
Calculated carryover basis of $500,000 from relinquished property. Added $200,000 additional cash given to acquire replacement property. Calculated deferred gain of $500,000. Determined new basis in replacement property of $700,000. Prepared detailed calculation worksheets showing all components. Explained depreciation implications and future tax consequences. Coordinated with client's tax advisor to verify accuracy.
Expected Outcome:
Client received accurate basis calculation showing $700,000 basis in replacement property and $500,000 deferred gain. Calculation worksheets provided for tax return preparation and Form 8824 filing. Client understands depreciation deductions will be based on $700,000 basis and deferred gain will be taxable upon future sale without another exchange.
Contact us to discuss your situation in Fort Worth, TX. We can share references upon request.
Identification rules
These rules protect exchange buyers in Fort Worth, TX. Each option is valid when you follow the written delivery requirements outlined by your Qualified Intermediary.
Three property rule
Name up to three properties of any value. Provide full legal descriptions and keep backups of delivery receipts.
Two hundred percent rule
Name more than three properties as long as aggregate fair market value stays under 200 percent of the relinquished price.
Ninety five percent rule
Identify any number of assets and close on at least 95 percent of the total value you listed.
Educational content only. Not tax, legal, or investment advice.