1031 exchange of turnkey rental

We have a vacation rental house in Hawaii that we are considering doing a 1031 exchange for another vacation rental. It is customary there for houses to be sold/bought as turnkey, with all furnishings, dishes, etc. From a tax perspective, I think the furnishings should be treated as an additional sale, but logistically that can get a bit complicated. Furniture is depreciated on different schedules if bought at separate times. Kitchen items, barbecue, etc. were simply expensed when purchased. Is it possible to exchange a furnished house for another furnished house and consider the entire thing as exchanging like for like? Or is it possible for tax purposes simply to forget about the furniture and "give" it to the new buyer? There must be a simple way to do this.

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Reply to
Bob
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I practiced in Hawaii for many years before moving to Thailand and I did returns for a number of clients there. Unless the furniture was treated as a separate asset (and depreciated over a shorter life) it was always treated as a unit. If it was depreciated separately, it has to be accounted for separately but I never excluded it from the exchange. Likewise, it does not matter if the replacement property is purchased furnished or unfurnished. Lanny K. Williams, CPA Nawarat, Williams & Co., Ltd. Income Tax Services for Expatriate Americans

Reply to
L K Williams

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