According to Mr. Jones on July 01, 2019, he and his wife exchanged their two family house in Westchester County (400 Pinebrook Blvd, New Rochelle, NY), which they rented entirely from January 01, 2010 to July 01, 2019, for a four-family rental property located at 685 Atlantic Avenue, Brooklyn, NY. At the time of the exchange, the FMV of the two-family house was $1,025,000, and the adjusted basis was $??????? (Calculate based on information provided below). The six-family house had an adjusted basis of $600,000 and a FMV of $900,000. The two-family home was subject to a $125,000 mortgage, which the buyer assumed.

Question: Can you please show me how you get the adjusted basis for the Jones exchange of property? I know this is a 1031 exchange & I know there has to be depreciation to get the adjusted basis, but I'm not sure how to do it.

Other Rental Income and Expenses for 2019 included: Pinebrook Property Avenue A Property Rental Income $90,000.00 $160,000.00 Mortgage Interest Expense $15,000.00 $38,000.00 Real Estate Taxes $8,000.00 $22,700.00 Utilities $3,000.00 $4,500.00 Insurance $2,400.00 $6,000.00 Water & Sewer $1,600.00 $4,800.00 Place in Service 01/01/2010 01/01/2019 Purchase Price $540,000.00 1,100,000.00