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If youve recently completed a 1031 like-kind exchange, you need to document your transaction for your accounting records. Although a deferred gain is an unearned revenue, it represents a future asset that counts as a liability on your balance sheet. Gains are seen as a liability until realized as an asset.
Include your name and identifying number at the top of each page of the statement. On the summary Form 8824, enter only your name and identifying number, Summary on line 1, the total recognized gain from all exchanges on line 23, and the total basis of all like-kind property received on line 25.
Include your name and identifying number at the top of each page of the statement. On the summary Form 8824, enter only your name and identifying number, Summary on line 1, the total recognized gain from all exchanges on line 23, and the total basis of all like-kind property received on line 25.
How do you report Section 1031 Like-Kind Exchanges to the IRS? You must report an exchange to the IRS on Form 8824, Like-Kind Exchanges and file it with your tax return for the year in which the exchange occurred.
When you dont exchange all your proceeds, its called a partial 1031 exchange. The portion of the exchange proceeds that are not reinvested is called boot, and are subject to capital gains and depreciation recapture taxes. Its important to note that boot can take different forms.
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Anyone who has realized gains from the sale or transfer of a property used for business purposes is required to file Form 4797 along with their regular tax return with the IRS for the year the gains were realized.
If you sold property that was your home and you also used it for business, you may need to use Form 4797 to report the sale of the part used for business (or the sale of the entire property if used entirely for business). Gain or loss on the sale of the home may be a capital gain or loss or an ordinary gain or loss.
Most deals are reportable with Form 4797, but some use 8949, mainly when reporting the deferral of a capital gain through investment in a qualified opportunity fund or the disposition of interests in such a fund. Use Form 4797 for sales, exchanges, and involuntary conversions.
Properties are of like-kind if theyre of the same nature or character, even if they differ in grade or quality. Real properties generally are of like-kind, regardless of whether theyre improved or unimproved. For example, an apartment building would generally be like-kind to another apartment building.
Use Form 4797 to report: The sale or exchange of property. The involuntary conversion of property and capital assets. The disposition of noncapital assets.