We have an S Corp NYC based real estate company client that manages, buys and sells real estate for investment purposes.
In August 2015 they sold a building for $2,700,000 which they purchased thru a prior like-kind exchange in 2012. The basis in the building was $100,000. With $2,250,000 of the proceeds from the sale they did a 1031 exchange and they received the remaining $450,000 in cash in 2015.
In December 2015 they purchased $1,000,000 of like-kind property.
1) What is the proper treatment of the $450,000 cash received in 2015? Does the cash receive long-term capital gain treatment or is it a 1231 gain?
2) How should the $450,000 cash received be treated on the NYC-4S return?
Thanks in advance for assistance with this question. We can be reached at 516 593-5633
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Jay Gordon
SHELDON GORDON, CPA
Lynbrook NY
516 593-5633
lynbrookcpas@gmail.com------------------------------