IRS Reporting
IRS Form 8824, Like Kind Exchanges: It is necessary for you to furnish the IRS with details about your relinquished and replacement properties, including the acquisition and conveyance dates of the relinquished property to the buyer. Additionally, you are required to provide the dates when you identified the like-kind replacement property to your Qualified Intermediary and when the acquisition and conveyance of the replacement property occurred. These specific dates are crucial to demonstrating compliance with the 45-calendar day identification rule and the 180-calendar day 1031 exchange period. IRS Form 8824 also solicits information related to any involved parties. Click here to download IRS Form 8824.
IRS Form 4797, Reporting Gain: If there is any taxable gain that needs to be recognized, it will be documented on either IRS Form 4797 or Schedule D, depending on the nature of the relinquished property. It is imperative to allocate your taxable gain among different categories, including ordinary income depreciation recapture, unrecaptured Section 1250 taxable gain, Section 1231 taxable gain, and capital gain.
IRS Form 6252, Installment Sales: If you received a seller carry-back note as part of the consideration from the buyer for your relinquished property, you might have the option to report all or a portion of the taxable gain using the installment sale basis, as outlined in Section 453 of the Internal Revenue Code. To do so, you would need to complete IRS Form 6252.
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