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Atlanta Deferred Exchange

Reporting a 1031 Exchange on Your Tax Return

 

Q: How do I report a 1031 exchange on my tax return?

 

A: You or your tax professional should use IRS form 8824, "Like-Kind Exchanges".  Usually, you would report the transaction in the year the relinquished property was sold.  Some of the information required includes a description of the properties sold and acquired and the date of your ID letter.  Additionally, the form will ask if a related party was involved in either the sale of the relinquished property or the acquisition of the replacement property. Reporting requirements are further outlined in IRS publication 544.

Qualified Intermediaries are not required to report 1031 transactions.  The only related exception is if the QI is directly paying you interest on funds held.  If so, the QI will report interest earned by sending you a 1099 and filing a report with the IRS on the interest earned.