Does anyone know how to enter 1031 proceeds and 1031 exchanges on chart of accounts?
Answer:
This is an excellent quesion. I don't know for certain, but my graduate degree in accounting tells me that you clear out all of the accounts associated with the old property, set up all of the accounts associated with the new property & populate the ones related to the acquisition. Any difference would be taken to a gain/loss or income/expense depending on the nature of your business. If one exists, it should be realized, not capitalized, because you are exchanging assets of different values & not waiting for the earning process to be complete.
If there is any boot with the transaction, that will bring in a world of complication because you will have to worry about allocations between the taxable & tax deferred components.
Good luck & I really hope someone else has a more authoritative answer, because it is really an excellent question! Other Questions and Answers: