LOSSES ON SECTION 1031 EXCHANGES: EXAMPLE (2 OF 2)
01.Core Concepts
The transaction could be illustrated as follows. Values After Exchange (New Property) Values Before Exchange (Old Property) $100,000 FMV $120,000 FMV 110,000 New Basis* 130,000 Basis ($10,000) Potential Loss ($10,000) Potential Loss * Basis reduced by boot Cash boot $20,000 No gain or loss recognized.