California form 3840

[janmarshburn]

I had California real property (1 parcel) that I exchanged into 3 real properties in Nevada in 2017. I've used TurboTax for the past couple years and have consistently had problems with this form e-filing. It is completed correctly but get error check messages that the property description must be completed on Schedule A Part II. The form's directions clearly state to leave blank for real property. If it's blank I have errors and can't complete the filing process. When I put a description in the field it rejects e-file. It's frustrating and have had this problem for the past 2 filing seasons. I used a professional software program in 2017, 2018 and 2019 without issue. I believe there is definitely a glitch in the software of TurboTax but doesn't seem to get fixed since it doesn't affect many filers. It is very frustrating to have to paper file after spending the money to efile.  I'm going to paper file again but does anyone know how to fix this?

[MonikaK1]

All taxpayers, regardless of residence status or commercial domicile, who exchange real property located in California for like-kind property located outside of California, must file form FTB 3840 with their California tax return. See here for California information on like-kind exchanges.

TurboTax will prepare the form and include it with the California return.

I have not found any current reported issues with this form. In order for us to troubleshoot the issue, you can send us a “diagnostic” file that has your “numbers” but not your personal information.  If you would like to do this, here are the instructions for TurboTax Online users: 

Go to the black panel on the left side of your program and select Tax Tools. 

1. Then select Tools below Tax Tools. 
2. A window will pop up which says Tools Center.  
3. On this screen, select Share my file with Agent. 
4. You will see a message explaining what the diagnostic copy is.  Click okay through this screen and then you will get a Token number. 
5. Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.  

We will then be able to see exactly what you are seeing, and we can determine what is going on in your return and provide you with a resolution.

[janmarshburn]

I'm using turbo tax premier desk top so are the directions for sending a file the same as online? I've gone ahead and paper filed the return but would like to be able to fix this so it won't happen in the future. I see that I can send a file to an agent - is that what I'd want to 

[MonikaK1]

Yes, you can use the directions for Send File to Agent.

[janmarshburn]

I've sent the file to agent - Token #1117535

I had to put a bogus description in the property description field in order to pass first error check. The instructions clearly state to leave blank if real property for e-filing - Sch A - CA form 3840

[MonikaK1]

Thank you. We will look at the file, and post in this thread with the results and any status updates on the issue.

[MonikaK1]

I have reviewed the data file and encountered the Review errors you noted prompting for completion of missing entries on California Form 3840.

I reviewed the California FTB's instructions for completing the form and did not find any instruction specifying that the entries flagged for review should not be completed for real property. 

Please let us know where you are finding the conflicting instructions.

CA Form 3840 FTB Instructions

CA Form 3840

Form FTB 3840 must be filed for the taxable year of the exchange and for each subsequent taxable year, generally, until the California source deferred gain or loss is recognized. Attach form FTB 3840 to the California tax return, or file separately as a California information return if the taxpayer does not otherwise have a California filing requirement.

If the taxpayer does not otherwise have a California filing requirement, file Form 3840 separately as a California information return.

Sign and mail form FTB 3840 to:

Franchise Tax Board
PO Box 1998
Rancho Cordova, CA 95741-1998

@janmarshburn 

[janmarshburn]

If you go to forms view for CA 3840, sch A - Part I properties given up, under property description it says personal property (leave blank for real property; this is an e-file requirement)

if I leave it blank it kicks out on error check. But with a value there it rejects for efile. I put NA to get it to the paper file point. As mentioned I have paper filed California but would like to efile in the future. 
I used to use proSeries software and that was the product used when I originally did the exchange in 2017.  It worked fine in that program for 2018 and 2019. Since I retired I didn’t wish to continue using the professional software as it was quite expensive and overkill for one return so I switched to TurboTax. This form has continued to be an issue since using TurboTax. 

[MonikaK1]

Thank you for the additional information. I am reporting the issue.

[IanSt]

EXACT SAME PROBLEM ENCOUNTERED.  HAS THIS BEEN FIXED?  THE FORM CLEARLY SAYS TO LEAVE BLANK FOR REAL PROPERTY, BUT IT FLAGS AN ERROR IF LEFT BLANK.  IF FILLED IN, IT REJECTS FOR E-FILE.

[MonikaK1]

The problem is not yet fixed. I just reported it when I became aware of it on April 6th, which is very late in the tax season.

If your situation requires California Form 3840, then I recommend that you mail your California return, which is what the previous poster who reported it is doing. We acknowledge that this is only a temporary solution.

[USDreadnought]

Turbo Tax, you are not listening to janmarshburn - read her comments again. We know we have to fill out the form 3840 for properties exchanged outside of CA, but Turbo Tax is making us fill in a line that says leave it blank for e-filing. Then CA rejects the form when e-filed because the line, which Turbo Tax required that we fill in, is filled in. When Turbo Tax is satisfied, CA rejects the e-filing!

[USDreadnought]

Greetings, USDreadnought, (c'est moi!) is having the same problem as janmarshburn and IanSt reported with form 3840! We know we have to fill out the form 3840 for properties exchanged outside of CA, but Turbo Tax is making us fill in a line that says leave it blank for e-filing. Then CA rejects the form when e-filed because the line, which Turbo Tax required that we fill in, is filled in. When Turbo Tax is satisfied, CA rejects the e-filing! I paid extra for e-filing and I am not happy with Turbo Tax recommending that I paper file, due to a glitch in the Turbo Tax Program. My email is <[email address removed]> thank you.

[balu1]

I did 

[krosiello]

I have the exact same problem, we did an exchange in 2018.  Still unable to file electronically.  Rejection after rejection.  I agree, glitch in the system