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Level 2

Question

California form 3840

Forum|Forum|3 years ago
April 4, 2023
4 replies
0 views

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?

TurboTax Premier Online

Monikak11

Level 2

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.

Then select Tools below Tax Tools.
A window will pop up which says Tools Center.
On this screen, select Share my file with Agent.
You will see a message explaining what the diagnostic copy is.  Click okay through this screen and then you will get a Token number.
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.

US_Winnie

Level 2

Hi TurboTax Experts,

Just received a letter from CA FTB for not filing 3840 in 2021. I had Like-kind exchanges in 2021. I checked tax filed records from 2021-2024, there were no 3840 had been filed. It looked like turbo tax didn't prepare and file 3840 automatically. How should I do to solve the issue?

RobertB4444

Level 15

You should go back to the 2021 through 2024 returns and add the 3840 to each year and then submit the amended returns to the CA FTB. You can also file the 3840 separately - it doesn't have a tax due, it's just informational - so you can download the form for 2021 and submit it and if you don't have any reporting requirement for any of the other years then you only need to submit 2021.

Here's a link to the 2021 3840.

@US_Winnie

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Monikak11

Level 2

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

janmarshburnAuthor

Level 2

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.

Monikak11

Level 2

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

krosiello

Level 2

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

JSCY

Level 2

I am experiencing the same issue with e-filing California. It was rejected with the error message prompting invalid or missing description of property given up in form 3840. I tried a few workarounds, including entering a blank space to pass the Turbo Tax review check but it still gets rejected during e-filing. Does anyone know if Turbo Tax is following up on this reported glitch? Do they have any plan to fix this conflicting issue that's been around for years? Since you can't e-file, will Turbo Tax give you partial refund for the state? Any insight is greatly appreciated. Thank you.

kmbayarea

Level 3

I have been dealing with this problem since first filing for tax year 2019 when I exchanged under 1031 a California rental property for multistate rental properties using DSTs( Delaware Statutory Trust) . I had talked to to those called Turbo Tax agents in 2020, 2021 and 2022 for help but to no avail. I finally brought this problem to the attention of a customer service rep of Turbo Tax last year to look into this apparent glitch software. and I was assured that it would be looked into. I have been filing the Form 3840 manually and it has been frustrating and hope this problem has been fixed as I just downloaded the Turbo Tax 2023 Premium.

USDreadnought

Level 2

kmbayarea, am I mistaken, or has Turbo Tax been ignoring the CA form 3840 issue for years? If I read your latest post correctly, you filed by paper in 2023 already, so the problem has not been fixed for 2023? Thank you, USDreadnought, Napa