Can freetaxusa handle reporting sale of 1031 exchange

Feb05

Greetings! I could not use freetax a few years ago when I did a 1031 exchange. The software did not incorporate it. My guess is it is very complex to report. Can it handle the sale of a property, however, that is from the exchange? Therefore a cash sale, not another exchange. Thank you.

GeorgeM

Hello Feb05:

Yes, assuming the sale of your business asset has occurred after the 1031 exchange, you can use our software to report its sale. The character of the business property just prior to its sale will dictate in what section of our software you should report its sale. For example, if the business asset had been converted to personal use prior to its sale, then you may report its sale by selecting the Income tab, then in the drop-down, select Sale of Business Assets.

However, if the business asset had not been converted to personal use prior to its sale, then you would report its sale by once again selecting the Income tab; however, in the drop-down, select Business Income (Schedule C). On the screen “Your Business” you should see a section for Depreciable Assets. In the Depreciable Assets section, you will enter information about the sale of the business asset.