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Share: In a like-kind exchange, you might exchange real property for similar property used solely for business or investment. If so, you might completely or partially defer gain on the exchange. If your gain is tax-deferred, you won’t recognize gain and pay tax until you dispose of the new property. What is Considered a Like-Kind Exchange?
Oct 19, 2023 · The Internal Revenue Service (IRS) uses Form 8824 for like-kind exchanges. TABLE OF CONTENTS. What happens in an exchange? Allowable exchanges. Exclusions and deadlines. What happens in an exchange? A like-kind exchange doesn't eliminate taxes; it just pushes them into the future.
Nov 29, 2023 · November 29, 2023. Understanding and correctly filing IRS Form 8824 is crucial for anyone involved in a like-kind exchange. This comprehensive guide will explain why mastering Form 8824 is essential for accurately reporting a 1031 exchange to the IRS.
1. Tax Reform Update: Generally, only real property now qualifies under the like-kind exchange rules. See the instructions for exceptions. Certain exchanges of property are not taxable. This means any gain from the exchange is not recognized, and any loss cannot be deducted.
Jun 16, 2023 · Part I: Information on the Like-Kind Exchange. Part II: Related Party Exchange Information. Part III: Realized Gain or Loss, Recognized Gain, and Basis of Like-Kind Property Received. Part IV: Deferral of Gain from Section 1043 Conflict-of-Interest Sales. We’ll go through each of these parts, one step at a time.
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.
Jan 31, 2024 · Home. Forms and Instructions. About Form 8824, Like-Kind Exchanges. Use Parts I, II, and III of Form 8824 to report each exchange of business or investment property for property of a like kind.
