Your CPA and attorney consultations are the foundation of a successful exchange. Show up prepared with your numbers, your questions, and a clear understanding of what you need from each professional. This prep sheet ensures you get maximum value from those meetings.
What to Bring to Your CPA Meeting
Documents
Numbers to Have Ready
Item | Value |
|---|---|
Original purchase price | $_____ |
Year purchased | _____ |
Estimated capital improvements total | $_____ |
Current mortgage balance | $_____ |
Expected sale price | $_____ |
Estimated selling costs | $_____ |
Your filing status | _____ |
Approximate annual taxable income (excluding sale) | $_____ |
State of residence | _____ |
State where property is located | _____ |
Questions for Your CPA
- What is my estimated tax liability if I sell without exchanging? (Get this broken out by component: federal LTCG, depreciation recapture, NIIT, state)
- Does a 1031 exchange make financial sense given my overall tax situation?
- Are there any AMT (alternative minimum tax) considerations?
- How will the exchange affect my depreciation schedules going forward?
- If I've done prior exchanges, what is my cumulative carryover basis?
- Should I consider a cost segregation study on the replacement property?
- What's the filing deadline for Form 8824, and will you prepare it?
- If I'm considering a DST, are there any passive activity loss considerations?
- Do I need to adjust my quarterly estimated tax payments?
- Are there state-specific 1031 rules I need to be aware of? (Some states, like California, require clawback reporting if you exchange out of state)
- If California property is involved: Do I need to file FTB 3840 on an outbound exchange, and each year afterward until the deferred California gain is recognized?
Note: Confirm with your CPA the 45-day identification and 180-day exchange period deadlines, as they directly impact your tax filing timeline.
What to Bring to Your Attorney Meeting
Documents
Questions for Your Attorney
- Is my current ownership structure correct for a 1031 exchange? (Same taxpayer must sell and buy)
- If the property is in an LLC or trust, are there any issues with the exchange?
- Should I review the QI's exchange agreement before signing?
- Are there any title or deed issues that could complicate the exchange?
- Do I need an assignment of the purchase/sale contract, and will you prepare it?
- If I'm considering a reverse exchange, what entity structure is needed for the EAT?
- Are there any estate planning considerations I should address before or during the exchange?
- If the property is jointly owned, what are the implications for each owner's exchange?
- Are there any partnership or entity restructuring options I should consider before selling?
- What state-specific legal requirements apply to this exchange?
After Your Meetings: Action Items
Action | Responsible | Deadline | Done |
|---|---|---|---|
Confirm CPA's tax estimate (compare to calculator results) | You | Before listing | [ ] |
Resolve any entity/title issues identified by attorney | Attorney | Before listing | [ ] |
Engage QI (after CPA confirms exchange makes sense) | You | 2+ weeks before sale | [ ] |
Share QI exchange agreement with attorney for review | You / Attorney | Before signing | [ ] |
Provide CPA with QI's contact information | You | At exchange start | [ ] |
Calendar follow-up: send CPA all exchange docs post-closing | You | Day of replacement close | [ ] |
Pro tip: Schedule both meetings before you list the property for sale. Discovering an entity problem, basis calculation error, or state-specific issue after you're under contract creates avoidable pressure. Preparation is free; surprises are expensive.