Hi,
I sold one property and in exchange I got 3 smaller properties back. In Form 8824, I realized there's no option for me to add more than 1 like kind property received, so I list the 3 addresses under properties received and added up the closing statements amounts such as FMV to report on one line.
Is that ok? Basically I am reporting the 3 properties as in it's 1. Am i doing it wrong?
In one exchange, is there an option to report different properties received? online or desktop??
What do I do with next year tax now that I had reported the 3 properties as one on this year tax?
Thanks in advance for your reply!!!!
Multi asset exchanges need the help of a tax pro. Not sure if you can do it with online but a statement needs to be attached to the return. The install is better but you're going to need help with getting those new properties in the system and how to handle the depreciation.
i agree it can't be done with any version of TT.
here are the instructions from form 8824 regarding multi-asset exchanges. They are covered by Regulations section 1.1031(j)-1.
basis in the exchanged property is figured per subsection (c)
while the instructions use the word "and" I believe it is more correct for the word to be "or". you have to know the basis in each property for purposes of depreciation and for purposes of disposal even through another 1031 exchange.
Reporting of multi-asset exchanges.
If you transferred and received (a) more than
one group of like-kind properties or (b) cash
or other (not like-kind) property, don't
complete lines 12 through 18 of Form 8824.
Instead, attach your own statement showing
how you figured the realized and recognized
gain, and enter the correct amount on lines
19 through 25. Report any recognized gains
on your Schedule D; Form 4797, Sales of
Business Property; or Form 6252,
Installment Sale Income, whichever applies
Thank you for your kind response.
does that mean I need to fill a form 8824 for each of the new properties I receive? On the form it ask what is the basis of the prosperity gave up to calculate deferred gain. To attribute what that is relative to each new property, I need to divide the basis of the property I sold pro-rata to the FMV of each new property correct?
this is not handled in any versions of TT even the desktop ones? That means I need to manually delete the figure populated by TT and insert additional forms myself?
does that mean I need to also amend my 2018 return? The numbers I reported was not incorrect, it just it’s all rolled up as one number to report. Thanks!!!
@mellish7777 Tax pro as in getting a tax pro person to help me outside of TT? Thanks!
yes a tax pro outside of TT. only one 8824. I take back that TT can't do the form. you can enter just totals for lines 18 to 24. but it's up to you to do the basis allocations for each replacement property. TT won't. And if the exchanges were completed in 2019, you have a schedule E to do for each. if you feel confident in doing the form and basis allocations then go for it. this is a public forum. we can't see the documents from the exchange trustee nor do we know anything about the relinquished property. just to make you aware, there can be tax traps in multi-property exchanges that could make a portion taxable.
here's a link to the instructions.
https://www.irs.gov/pub/irs-pdf/i8824.pdf
here's a link to the regs.
https://www.law.cornell.edu/cfr/text/26/1.1031(j)-1