A 1031 exchange is reported on IRS form 8824
The IRS has requested comments on IRS Form 8824, ‘Like-Kind Exchanges’, be submitted to them prior to March 21, 2016. The Form 8824 is used by all taxpayers completing an IRC Section 1031 exchange to report the exchange of business or investment property, and deferral of capital gain. This routine request is the first time since 1990 the IRS has formally requested comments on this form.
We think this is one of the most difficult IRS forms to complete. The form directions use language relating to older style 1031 exchanges where there was assumption of debt, which was much more prevalent prior to the IRS regulation 1.1031(k) being published in 1990. Realty Exchange typically sees deferred exchanges where debt is paid off when someone transfers a relinquished property, then reacquires new debt on the replacement, versus assuming existing debt. As a result of the forms’ complexity and to help exchangers we annually publish “Reporting the Like-Kind Exchange of Real Estate Using Form 8824”.
Written comments should be submitted to Michael Joplin, IRS, Room 6517, 1111 Constitution Ave. NW., Washington, DC 20224. Question should be submitted to L. VanDyke at the same address or to Lanita.VanDyke@irs.gov . In particular comments are requested on “ways to enhance the quality, utility, and clarity of information” being reported. Also comments should include the time and cost required to complete the Form 8824.