CPA and Attorney Consultation Prep Sheet
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Key Takeaways
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
- Most recent 2-3 years of tax returns (complete, including all schedules)
- Schedule E for the property being sold (all years)
- Original purchase closing statement (HUD-1 / ALTA / Closing Disclosure) for the property
- Records of all capital improvements (invoices, receipts, permits)
- Current mortgage statement
- Depreciation schedule for the property (if available)
- Estimated sale price and any listing agreement
- Prior 1031 exchange documentation — Form 8824, exchange agreements — if this isn't your first exchange
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
- Current deed for the property
- Entity documents (LLC operating agreement, trust document, partnership agreement) if the property is held in an entity
- Current lease agreements with tenants
- Any pending legal issues affecting the property (liens, lawsuits, code violations)
- Draft exchange agreement from your Qualified Intermediary (QI) (for review)
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.
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45-Day Identification Worksheet
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Complete one column per property. Compare at least 3 candidates. Score each property 1-5 on qualitative factors, then tally for an overall ranking.