TAX CONSEQUENCES OF A SECTION 1031 EXCHANGE
01.Core Concepts
Section 1031 provides the following basis calculation formula for the like-kind property received. Basis of like-kind property transferred + Basis of boot given + Gain recognized – Fair market value of boot received – Loss recognized As a validity check, the basis of the like-kind property received also can be calculated using the following formula: Fair market value of like-kind property received – Postponed gain, or + Postponed loss If the basis has been properly calculated with each formula, the results will be the same.