Like Kind Exchange 1031 Form

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.

Like kind exchange 1031 form.

If you receive cash relief from debt or. To defer paying capital gains taxes using a 1031 like kind exchange your replacement property must be of the same kind as the property sold. 1 to put it simply this strategy allows an investor to defer paying capital gains taxes on an investment property when it is sold as long another like kind property is purchased with the profit gained by the sale of the first property. Generally if you make a like kind exchange you are not required to recognize a gain or loss under internal revenue code section 1031.

Information on the like kind exchange part ii. The exchange is reported on irs form 8824 like kind exchanges. Like kind exchanges are heavily monitored by the irs and require. You also must hold both properties for business productive use in a trade or investment 26 u s c.

Certain members of the executive branch of the federal government and judicial officers of the federal government use part iv to elect to defer gain on conflict of interest sales. As part of a qualifying like kind exchange. Related party exchange information part iii. Part iii computes the amount of gain required to be reported on the tax return in the current.

Like kind exchanges when you exchange real property used for business or held as an investment solely for other business or investment property that is the same type or like kind have long been permitted under the internal revenue code. Form 8824 figures the amount of gain deferred as a result of a like kind exchange. Not used for 1031 exchange used only for. The term 1031 exchange is defined under section 1031 of the irs code.

Realized gain or loss recognized gain and basis of like kind property received part iv. What is considered like kind property. Use parts i ii and iii of form 8824 to report each exchange of business or investment property for property of a like kind. Although most swaps are taxable as sales if yours meets the.

Generally only real property should be described on line 1 or 2. Gain deferred in a like kind exchange under irc section 1031 is tax deferred but it is not tax free. We ll discuss like kind property in more detail in section four. The exchange can include like kind property exclusively or it can include like kind property along with cash liabilities and property that are not like kind.

Broadly stated a 1031 exchange also called a like kind exchange or a starker is a swap of one investment property for another. Information on the like kind exchange.