In like-kind exchange, should I use ONLY "Depreciation" and "form 8824 " in Deductions, or do I ALSO need to use the "Schedule D", "4797 form" and "form 8824" in Income?

Forum|Forum|6 years ago
December 7, 2019
2 replies
20 views

Please, is there anyone who could help me on this tax return for a client. First time using PTO and I'm having a hard time for the past week. When client has a 1031 exchange property from CA selling it in 2018 which had a depreciation of the land, and a replacement property in the same year in NY.
Should I use ONLY "Depreciation" and "Like-Kind exchange 8824 form" in Deductions, or do I ALSO need to use the "Schedule D", "4797 form" and "Like-Kind exchange 8824 form" in Income?

Also, do I need to file the form CA 3840 final as well? TIA

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Best answer by George4Tacks

If you have depreciation, this is likely the article to get you started. https://accountants-community.intuit.com/articles/1628244-how-do-i-enter-a-like-kind-exchange-in-the-depreciation-screen

Yes, you do need to file the 3840 for 2018 and every year thereafter until the exchange property is sold.

George4TacksAnswer

Level 15

If you have depreciation, this is likely the article to get you started. https://accountants-community.intuit.com/articles/1628244-how-do-i-enter-a-like-kind-exchange-in-the-depreciation-screen

Yes, you do need to file the 3840 for 2018 and every year thereafter until the exchange property is sold.

Answers are easy. Questions are hard!

C

ckellerAuthor

Level 2

In this case the exchange property was sold the same year, do I need to file the CA 3840 as Final? Thank you!

abctax55

Level 15

"...which had a depreciation of the land".

Land is not depreciated. Are there also improvements involved?

HumanKind... Be Both

T

TaxGuyBill

Level 15

That was my original thought too, but I *THINK* the situation is that the prior property had depreciation, then a 1031 exchange was done for land. So selling the land would still result in §1250 gain from the depreciation of the prior property.

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