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CA form 3840

TurboTax desktop Home & Business. Did a like kind exchange in 2022, think things are entered correctly. Running error check, it’s flagging a problem with form 3840, says the total of Part III line 10 (allocated deferred gain) must equal Part II line 8 (adjusted basis of other property given up), which is zero (there was no other property) and makes no sense. Have spoken with two of the TurboTax support people, they have no idea how to proceed. The second person sent me a link to TurboTax live to get help. But TurboTax live only seems to work with the on-line version, I am using the desktop. It was previously recommended by TurboTax that I use the desktop version due to the access to forms. How does one talk to a real CPA at TurboTax these days? Help!!

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1 Reply
MonikaK1
Expert Alumni

CA form 3840

Yes, only TurboTax Online features TurboTax Live help from Tax Experts by phone. TurboTax Desktop has product support available by phone.

 

The instructions for Form 3840 can be confusing when referring to the "Parts" because there is a Part I and Part II on the first page, and another Part I and Part II on the second page, Schedule A. The error message you are seeing is referring you to Part II line 8 on the second page, Schedule A, and not to Part II line 8 (adjusted basis of property given up).

 

See here for California information and instructions for the completion of Form 3840.

See here for the actual Form 3840.

 

The instructions Schedule A Part III, line 10 state:  

 

If only one property was received in the exchange, enter the amount from Schedule A, Part I, line 8, on Part III, line 10, column D.

 

If more than one property was received, allocate the entire California source deferred gain amount from Schedule A, Part I, line 8 to each property received in the exchange, regardless of its location. Enter the allocated California source deferred gain amount for each property received on Schedule A, Part III, line 10. Attach a statement that shows how the California source deferred gain was allocated to each property received.

 

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

 

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 on a California tax return. 

 

If you didn't exchange California property for property located outside of California, then Form 3840 is not applicable. 

 

 

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