LOSSES ON SECTION 1031 EXCHANGES: EXAMPLE (1 OF 2)
01.Core Concepts
Ten years ago, Dorothy purchased a residential rental property for $200,000. She has taken $70,000 in depreciation deductions over her holding period, resulting in an adjusted basis of $130,000. The fair market value of the property is $120,000. Dorothy engages in a Section 1031 exchange for a new property worth $100,000 and receives cash in the amount of $20,000.