Get the free Form 8824

This form is used to report like-kind exchanges and nonrecognition of gain from conflict-of-interest sales. It helps in declaring the exchange of properties that are of like kind and ensuring compliance

How to fill out form 8824

How to fill out Form 8824

1. Gather your identification details, including your name and taxpayer identification number.
2. Obtain information about the property being exchanged, including address and description.
3. Provide information about the relinquished property such as its fair market value and adjusted basis.
4. Enter details of the replacement property, including its fair market value and adjusted basis.
5. Complete the statement regarding the nature of the exchange, indicating if it is a like-kind exchange.
6. Fill out any additional details or attachments as required by your specific exchange situation.
7. Review the completed form for accuracy and completeness before submission.

Who needs Form 8824?

1. Taxpayers who have participated in a like-kind exchange of real estate or depreciable business assets.
2. Individuals or entities that wish to defer capital gains taxes on properties exchanged under IRS regulations.

People Also Ask about

Do I need to report a 1031 exchange on my tax return?

After completing a 1031 exchange, you must report the transaction to the IRS using Form 8824 to maintain the transaction's tax-deferred status. You must file the form with your annual income tax return for the year in which the exchange was completed.

Which of the following does not qualify for a tax-deferred exchange?

Under IRC §1031, the following properties do not qualify for tax-deferred exchange treatment: Stock in trade or other property held primarily for sale (i.e. property held by a developer, “flipper” or other dealer) Securities or other evidences of indebtedness or interest. Stocks, bonds, or notes.

What qualifies for a tax-free exchange?

The main requirements for a 1031 exchange are: (1) must purchase another “like-kind” investment property; (2) replacement property must be of equal or greater value; (3) must invest all of the proceeds from the sale (cannot receive any “boot”); (4) must be the same title holder and taxpayer; (5) must identify new

What must be in the United States in order for an exchange to qualify for tax deferral?

The exchanged properties must be in the United States to qualify. There are strict time limits: The replacement property must be identified within 45 days, and the exchange must be completed within 180 days. Cash or mortgage differences, called “boot,” can trigger tax liabilities.

What is required on a form 8824?

Include your name and identifying number at the top of each page of the statement. On the summary Form 8824, enter only your name and identifying number, “Summary” on line 1, the total recognized gain from all exchanges on line 23, and the total basis of all like-kind property received on line 25.

How do you qualify for a tax deferred exchange?

You must acquire one or more replacement properties that are equal to or greater in net purchase value than the net sales value of the relinquished property you sold. You must reinvest all of your net cash proceeds from the sale of the relinquished property.

What happens if you don't file form 8824?

What happens if I do not file Form 8824? There are no penalties for failure to file Form 8824 but there are consequences. For starters, you can't defer capital gains tax. This means that the exchange may be treated as a sale transaction subject to capital gains tax.

Who cannot do a 1031 exchange?

You cannot trade partnership shares, notes, stocks, bonds, certificates of trust or other such items. You cannot trade investment property for a personal residence, property in a foreign country or “stock in trade.” Houses built by a developer and offered for sale are stock in trade.

For pdfFiller’s FAQs

What is Form 8824?

Form 8824 is used to report like-kind exchanges of real property under the Internal Revenue Code. It allows taxpayers to defer paying taxes on the gains from exchanging certain types of property.

Who is required to file Form 8824?

Taxpayers who have engaged in a like-kind exchange of real property must file Form 8824. This includes individuals, partnerships, corporations, and other entities that do such transactions.

How to fill out Form 8824?

To fill out Form 8824, taxpayers need to provide details about the properties exchanged, including their fair market values, the dates of acquisition and exchange, and any related transaction costs. The form has specific sections that guide users on how to report this information.

What is the purpose of Form 8824?

The purpose of Form 8824 is to provide the IRS with information about like-kind exchanges that may qualify for tax deferral under Section 1031 of the Internal Revenue Code, thereby helping ensure compliance with tax laws.

What information must be reported on Form 8824?

Form 8824 requires reporting information includes the description of the exchanged properties, their fair market values, date of acquisition, date of exchange, any gain or loss recognized, and any liabilities assumed or relief provided.