Get the free Form 8824

This form is used to report like-kind exchanges of property for tax purposes, including details about property given up and received, and any associated gains or losses.

How to fill out form 8824

How to fill out Form 8824

1. Gather necessary information about the like-kind property you are exchanging.
2. Complete the top section of Form 8824 with your name, Social Security number, and the tax year.
3. Describe the relinquished property in Part I, including the date acquired, date sold, and the fair market value.
4. Provide details about the replacement property in Part II, including the date acquired and its fair market value.
5. Complete Part III by detailing the calculations of any gain recognized and the amount of deferred gain.
6. Review the form for accuracy and sign it before filing.
7. Attach Form 8824 to your tax return when filing.

Who needs Form 8824?

1. Taxpayers who have exchanged property held for productive use in a trade or business or for investment, meeting the requirements for like-kind exchanges under IRS Section 1031.

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 a tax form used by taxpayers to report like-kind exchanges of property under Section 1031 of the Internal Revenue Code.

Who is required to file Form 8824?

Taxpayers who engage in a like-kind exchange of real estate or other qualifying property must file Form 8824.

How to fill out Form 8824?

To fill out Form 8824, taxpayers must provide details about the property exchanged, the dates of the exchange, the cost basis of the properties involved, and any gain or loss realized.

What is the purpose of Form 8824?

The purpose of Form 8824 is to report the exchange of like-kind properties and calculate any gain or loss that may need to be recognized for tax purposes.

What information must be reported on Form 8824?

Form 8824 requires reporting of the description of the properties involved, the date of the exchange, the adjusted basis of both properties, and any gain or loss on the exchange.