1031 Exchange - investment property sold in 2021 and closed 2/28/22 replacement property

[HIPA76TIA]

I was finally able to fill out Form 8821 to its entirety.  However, I am not able to file/print my federal tax return because turbo tax states the form is not approved for release at this time until 3/31/22.   My questions:

1.  Does the 1031 exchange information I entered on federal flow automatically to my NJ tax return or do I have to make it manually generate by following some steps? If so, what are they?

2.  I always file a non-resident NY tax return as well because my husband works in NY.  Therefore, same question as above.  Will the information just flow into the NY state tax return or do I have to force it to generate?  

**My investment property sold was located in NJ and the replacement property purchased is in Florida**  

Thank you for any help! 

[tagteam]

I wish I could provide you with a definitive answer here, but I do not have access to the NJ and NY returns in my test package.

I can tell you, however, that with respect to Illinois and a test 1031 exchange I entered, the information did not flow to the IL return (other than just the basic gain figure). 

[HIPA76TIA]

Would you know if the 1031 Exchange Rules apply to federal and state tax returns?   

I know I can defer the gain for federal purposes - but not 100% sure for my New Jersey tax return. 

Thank you.

[MarilynG1]

The 'deferred gain' is reflected in the Cost Basis of the new asset in the Rental section. Most states follow the federal code, allowing you to defer your state taxes on exchanges. 

If you had a 'realized gain' (Line 19 on Form 8824), it flows to Schedule D and Form 1040.

This would be reflected in the Adjusted Gross Income amount that most states start their calculations with.  

Your state may generate a Form 8824 (California does) but the numbers are the same as the Federal 8824.

Click this link for more info on State 1031 Exchanges. 

[HIPA76TIA]

Okay - so is it safe to say if I filled out the Form 8824 correctly on my federal return than if I had any gain from 1031 exchange than it would flow into NJ state tax return.  However, I did defer the gain on sale- therefore I do not need to fill out any other "Special form" for NJ purposes?

Thank you.

[RobertB4444]

@HIPA76TIA  There is no additional form required for the 1031 exchange in New Jersey and TurboTax should carry your information over just fine.  Double check the New Jersey information in order to be sure but you should be all set.