How to handle Settlement cost for Sale and Purchase of a 1031 Exchange

[jandamf]

I did my first 1031 exchange last year and the QI handled the sale and purchase.

I have settlement cost on the sale and purchase that were factored into the 1031 Exchange proceeds.

I entered these costs into the worksheet for the 8824 EXCHANGE EXPENSES line item.

The question is, do I also enter these settlement cost line items into the expenses for each of the exchange properties?

[MaryK4 · Accepted solution]

No, the costs will be absorbed into the basis of the exchange property so you do not want to enter again.