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Form 8824 is the 1031 Exchange tax form. We explain the Instruction for completing it, using real numbers from a real deal, and your HUD-1.
Jun 13, 2023 · The primary information needed includes: Details of the property given up. Details of the replacement property. Dates of the exchange and the acquisition. Fair market value of both properties. Adjusted basis of the given up property. Any cash received or paid. Liability assumed by the other party or yourself.
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How does form 8824 work?
Do I need a tax form 8824 for a like-kind exchange?
Do I need to prepare IRS form 8824?
Do I need to file form 8824 If I transfer property?
Use Parts I, II, and III of Form 8824 to report each exchange of business or investment real property for real property of a like kind. Form 8824 figures the amount of gain deferred as a result of a like-kind exchange.
Total to Form 8824 Line 15 (not less than zero) $ 4 (Taxable as boot) Form 8824 Line 16 FMV Replacement Property Total from line 17, worksheet 2 $ 5 Form 8824 Line 18 Basis and Net Amounts Paid Purchase price, Exchange Property $ 6 Less depreciation taken to date of sale ( ) 7 Less deferred gain from previous 1031 Exchange (if any) ()8
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Example 1: $80,000 (+) $15,000 = $95,000 Enter $95,000 (Line 16 (+) Line 15 = Line 17) Example 2: $120,000 (+) $6,000 = $126,000 Enter $126,000 (Line 16 (+) Line 15 = Line 17) Basis-ReplacementLine 18: List the sum of: Property a. Adjusted basis of relinquished property (property given up). b.
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Oct 19, 2023 · Say you paid $20,000 for a piece of business or investment real estate and sold it for $30,000 ($30,000 - $20,000 = $10,000 capital gain). Rather than have the $10,000 profit taxed as a capital gain, the like-kind exchange allows the gain to be "passed on" to the new property used for business.
Similar in nature. Similar in character. Not held for resale or flipped. Example of a Like-Kind Exchange: You might give up a rental home in need of repairs in exchange for another rental home that’s well maintained. If so, it’s a like-kind exchange. To learn more, see Publication 544: Sales and Other Dispositions of Assets at www.irs.gov.
