1031 Tax Filing Requirements
Form 8824 - Reporting The Exchange
A form #8824, used for like-kind exchanges, is filed on an exchanger’s tax return for the year in which the exchange was completed.
The Like-Kind Exchange Form #8824 reflects the exchange on the Exchanger’s tax return in the year the exchange began (i.e., the year the relinquished property was sold to a buyer.) The Exchanger is required to provide the following information on Form #8824:
Part I Information On The Like-Kind Exchange
1. A description of the property given up in exchange for a like-kind property;
2. Describe the property received in exchange for like-kind;
3. Acquisition date of like-kind exchange property;
4. Transfer date of property;
5. Identification of like-kind exchange property;
6. The date on which like-kind replacement property was received.
Part II Related Party Exchange Information
Part III Realized Gain Or (Loss), Recognized Gain, Basis
Part IV Deferral of Gain From Section 1043 Sales
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FORM 4797/SCHEDULE D – REPORTING THE GAIN
A Form #4797 or Schedule D is filed to report taxable gains. There are four types of gain to allocate: capital gain, ordinary income depreciation recapture, unrecaptured Section 1250 gain, and Section 1231 gain.
FORM 6252 – REPORTING AN INSTALLMENT SALE
The Exchanger must file Form #6252, Installment Sale Income if it carries back a note to a buyer on the sale of the relinquished and can report the taxable gain.
CONSULT WITH YOUR TAX ADVISOR
The following is a brief summary. Exchangers should review their tax situation with a tax advisor-specific situation and tax filing requirements.
DUE DATE OF THE TAX RETURN
It is necessary for Exchangers to complete their exchange within 180 calendar days, or by the date their tax return is due. If an Exchanger closes an exchange, the following will occur:
- During the period of October 17 through December 31;
- April 15 is the deadline for filing tax returns;
- Wishes to be able to complete their exchange by purchasing one or more replacement properties within 180 calendar days;
The Exchanger can extend the date of his or her tax return until August 15 by filing Form #4868 by April 15.
The Exchanger’s Exchange Period” is shortened if the tax extension is not filed by the filing date for their tax return.
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