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****** Scenario 2: Like-Kind Exchange Gone Wrong Taxpayer intends...

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Accounting

******
Scenario 2: Like-Kind Exchange Gone Wrong
Taxpayer intends to do a Section 1031 exchange of a rental property.
Identifies a replacement property and uses a qualified intermediary.
Within the 45-day identification window, the replacement property deal falls apart.
The taxpayer misses the 180-day exchange window and receives the cash proceeds from the qualified intermediary.
Original Property Basis: $200,000, Sale Price: $600,000
Interest and Dividend Income: $1,000
Itemized Deductions: $13,000
Allowable deduction for self-employment tax: None
Calculate:
AGI, Taxable Income, and Total Tax Liability resulting from the failed exchange.
Explore potential "failed exchange" strategies like reverse exchanges.

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