seek professional help for this issue

We can all give you free suggestions but the value of our free advice is reflected in the cost of our advice

My accountant would answer that in 1 phone call

Razorback-Tim,

Sounds like you are correct--depreciate the amount above the 1031 sale amount:

1031 sale: $100,000.

1031 Purchase $200,000.

The basis is adjusted. So you would depreciate the $100,000 on the purchase plus the $15,000 in improvements if your were buying a fixer upper. The other $100,000 is already utilized. This does assume though, you used the initial $100,000 asset completely. If you used only -say $60,000 of the initial $100,000 - then you would be expected to start out at $140,000 of the new purchase and add in any capital improvements.

Is this property in an opportunity zone? That could throw you another curve ball.

Ray,

That is very helpful.

So I purchased the property that I'm selling with the 1031 for 50,000 14 years ago. So I have taken half of my depreciation ($20,000). So I will continue the same depreciation for the next 14 years. And then add a second depreciation for the 100,000 excess I purchase the other property for?

Plus fix up.

14 years ago you started out on this property not at $50,000. Since it was a 1031 - the 50K place could have started out at 35K basis. Over 14 years you have had to upgrade the thing so you might have added XX thousand in updates. Since you are using 28 years - I am assuming that this is a residential property with a 27.5 year depreciation period. So let just say you have done minimal work on this place but needed to replace three of major system on the place......roof, windows and a finance worth 15,000. If you sold it today the place would have 30 in the original depreciation and another 8,000 in improvements left. (These don't have to depreciate at 27.5 yrs since they are upgrades) so you have a total $38,000 left of future depreciation when you sold that this year. You used 20,000 in depreciation plus $7,000 in improvement depreciation for a total of $27K.

You bought that 100K property in Colorado. The land to improvement ratio is 25% to 75% so out of the $100,000 purchase price you are purchasing $75,000 of additional depreciation. One day one of your purchase, the depreciation that have taken on the new building starts out at $27,000. Assuming you bought another home, the other 70,000 will be divided over the next 27.5 years so just under $3,000 a year should be added to the $27,000.

This depreciation is a tax liability that is taxed at 25% unless of course you end up dying and then the basis will be stepped up to the current market value of the asset to the person inheriting it .

Ray,