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Scenario $2$: Like$-$Kind Exchange Gone Wrong

Taxpayer intends to do a Section $1031$ exchange of a rental property.

Identifies a replacement property and uses a qualified intermediary.

Within the $45-$day identification window, the replacement property deal falls apart.

The taxpayer misses the $180-$day exchange window and receives the cash proceeds from the qualified intermediary.

Original Property Basis: $$200,000,$ Sale Price: $$600,000$

Interest and Dividend Income: $$1,000$

Itemized Deductions: $$13,000$

Allowable deduction for self$-$employment tax: None

Calculate:

AGI, Taxable Income, and Total Tax Liability resulting from the failed exchange.

Explore potential "failed exchange" strategies like reverse exchanges.