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- Form 8824 figures the amount of gain deferred as a result of a like-kind exchange. Use Part III to figure the amount of gain required to be reported on the tax return in the current year if cash or property that isn't of a like kind is involved in the exchange. Also, use Part III to figure the basis of the like-kind property received.
www.irs.gov › instructions › i8824Instructions for Form 8824 (2023) | Internal Revenue Service
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Does IRS use form 8824 for like-kind exchanges?
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What if a property does not qualify for a like-kind exchange?
Form 8824 figures the amount of gain deferred as a result of a like-kind exchange. Use Part III to figure the amount of gain required to be reported on the tax return in the current year if cash or property that isn't of a like kind is involved in the exchange. Also, use Part III to figure the basis of the like-kind property received.
Jun 13, 2023 · Adjusted basis of the given up property; Any cash received or paid; Liability assumed by the other party or yourself; Filling Out Form 8824: A Step-by-Step Process. Part I: Information About the Like-Kind Exchange. Line 1: Describe the property you gave up and the like-kind property you received.
Jun 16, 2023 · Part III: Realized Gain or Loss, Recognized Gain, and Basis of Like-Kind Property Received. In Part III, we’ll calculate any realized gain or loss, recognized gain, and basis of property received in the like-kind exchange transaction. If you gave up property that was not like-kind, complete Lines 12 through 14.
A like-kind exchange, also known as a Section 1031 exchange, is a way of trading or exchanging assets and, in many cases, deferring gain on the trade (or exchange). “Like-kind” means that the property you trade must be of the same type as the property you receive.
Oct 19, 2023 · By law, several kinds of property do not qualify for a like-kind exchange: • Business inventory. • Stocks, bonds and other securities. • Ownership interest in a partnership business. • Certificates of trust or an interest in a trust as a beneficiary. • Rights to sue.
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Nov 29, 2023 · Additionally, Form 8824 helps track the basis of like-kind property, which is vital for future tax calculations. Eligibility Criteria: Who Can Utilize a 1031 Exchange? To be eligible for a 1031 exchange, the involved properties must meet certain criteria. The relinquished and replacement properties must be held for business or investment purposes.
IRS Regulations changed effective January 1st, 2018. A like-kind exchange, or 1031 exchange, can only be completed for real property. See here for more details. A like-kind exchange consists of three main steps. All three steps must be completed for the tax return to contain the correct information. Step 1: Disposing of the original asset.
