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Top IRS Publications & Forms Related to §1031 Exchanges

There are a number of helpful publications and forms that the IRS puts out to assist individuals in §1031 Like-Kind Exchanges. The following are the ones that our clients use the most frequently.

  1. The IRS released this "Fact Sheet" on Like-Kind Exchanges under IRC § 1031 in February 2008: here.
  2. To see what the IRS thinks about Like-Kind Exchanges. Click here to get their “Real Estate Tax Tips” www.irs.gov/businesses/small/industries/article/0,,id=98491,00.html.
  3. Go to their more general Publication 544 on “Sales and Other Dispositions of Assets” where there is general information on non-taxable exchanges at www.irs.gov/pub/irs-pdf/p544.pdf
  4. The form needed to report §1031 Exchanges is Form 8824 entitled “Like-Kind Exchanges”  www.irs.gov/pub/irs-pdf/f8824.pdf We would recommend that you look at Parts I to III in particular to see what must be reported.
  5. Form 4797 “Sales of Business Property” www.irs.gov/pub/irs-pdf/f4797.pdf or Schedule D (1040) “Capital Gains and Losses” www.irs.gov/pub/irs-pdf/f1040sd.pdf and its instructions www.irs.gov/pub/irs-pdf/i1040sd.pdf is used if you don’t defer taxes under §1031 or have money or unlike property received in the exchange.
  6. Before and after your exchange (unless you own property similar to raw land) you should be using Schedule E “Supplemental Income & Loss” www.irs.gov/pub/irs-pdf/f1040se.pdf  and its Instructions  www.irs.gov/pub/irs-pdf/i1040se.pdf to report rental income and expenses from your investment property. If you are a partnership or S Corp you would use Form 8825 for “Rental Real Estate Income and Expenses” www.irs.gov/pub/irs-pdf/f8825.pdf
  7. If you moved and needed to change your address use Form 8822 “Change of Address”  www.irs.gov/pub/irs-pdf/f8822.pdf
  8. If you can’t find a copy of a tax return and needed to request one use Form 4506 (Remember to either request a free transcript, or actual copy for about $40.) www.irs.gov/pub/irs-pdf/f4506.pdf
  9. What some clients forget that do a partial exchange and take money or boot out of the property is that it might trigger estimated taxes during the quarter or year of recognition. Publication 505 on “Tax Withholding & Estimated Tax” will help www.irs.gov/pub/irs-pdf/p505.pdf . In some cases you may have estimated taxes but be able to delay making payments if you use Form 2210 www.irs.gov/pub/irs-pdf/f2210.pdf and its Instructions on “Underpayment of Estimated Tax” www.irs.gov/pub/irs-pdf/i2210.pdf
  10. One generally misunderstood item is that the exchange period is the shorter of 180 days or the filing of your return. If your tax return is due before you want your exchange to end then you must automatically extend it with Form 4868 www.irs.gov/pub/irs-pdf/f4868.pdf  Even though the extension is automatically granted, don’t forget to do this.
  11. If you need additional forms, at any time click here for IRS Forms and Publications www.irs.gov/formspubs/index.html and you will have access to all of them including Fill-In Forms www.irs.gov/formspubs/article/0,,id=98121,00.html  that you can fill in and print from your computer then file with the IRS.