Vern owned farm acreage he inherited several years ago. There was no building nor improvement to the land. He decided to sell the farm in an exchange and acquired two rental houses. The Fixer House and The Money-Pit House closed escrows on separate occasions, but both were within the requirements of the 1031 exchange: The Big Easy Farm: Inherited Basis $451,739 Mortgage 0 Sale Price 769,633 Closing Costs 26,754 The Fixer House: Purchase Price $668,050 Mortgage 401,615 Closing Costs 11,744 Cash from Accommodator 278,179 The Money-Pit House: Purchase Price $740,200 Mortgage 289,829 Closing Costs 14,329 Cash from Accommodator 464,700
Required: 1. How much gain is taxable, if any?
2. What is the basis for the exchanged properties combined as a whole?
3. What are the allocated basis for The Fixer House and The Money-Pit House?