Instructions For Form 8824 - 2009 (Page 2 of 4) in pdf

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1. Subtract line 18 from line 17.

An exchange made with a related party

Specific Instructions

Subtract the amount of the exclusion from

through an intermediary (such as a

qualified intermediary or an exchange

the result. Enter that result on line 19. On

Lines 1 and 2. For real property, enter

accommodation titleholder, as defined in

the dotted line next to line 19, enter

the address and type of property. For

Pub. 544), or

“Section 121 exclusion” and the amount

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personal property, enter a short

An exchange made by a disregarded

of the exclusion.

description. For property located outside

entity (such as a single member limited

2. On line 20, enter the smaller of:

the United States, include the country.

liability company) if you or a related party

a. Line 15 minus the exclusion, or

owned that entity.

Line 5. Enter on line 5 the date of the

b. Line 19.

written identification of the like-kind

If the related party (either directly or

Do not enter less than zero.

property you received in a deferred

indirectly) or you dispose of the property

3. Subtract line 15 from the sum of

exchange. To comply with the 45-day

received in an exchange before the date

lines 18 and 23. Add the amount of your

written identification requirement, the

that is 2 years after the last transfer of

exclusion to the result. Enter that sum on

following conditions must be met.

property from the exchange, the deferred

line 25.

1. The like-kind property you receive

gain or (loss) from line 24 must be

in a deferred exchange must be

reported on your return for the year of

designated in writing as replacement

disposition (unless an exception on line

Property used partly as home. If the

property either in a document you signed

11 applies).

property given up was used partly as a

or in a written agreement signed by all

home, you will need to use two separate

If you are filing this form for 1 of the 2

parties to the exchange.

Forms 8824 as worksheets — one for the

years following the year of the exchange,

2. The document or agreement must

part of the property used as a home and

complete Parts I and II. If both lines 9 and

describe the replacement property in a

one for the part used for business or

10 are “No,” stop.

clear and recognizable manner. Real

investment. Fill out only lines 15 through

If either line 9 or line 10 is “Yes,” and

property should be described using a

25 of each worksheet Form 8824. On the

an exception on line 11 applies, check the

legal description, street address, or

worksheet Form 8824 for the part of the

applicable box on line 11, attach any

distinguishable name (for example,

property used as a home, follow steps (1)

required explanation, and stop. If no line

“Mayfair Apartment Building”).

through (3) above, except that instead of

11 exceptions apply, complete Part III.

3. No later than 45 days after the date

following step (2), enter the amount from

Report the deferred gain or (loss) from

you transferred the property you gave up:

line 19 on line 20. On the worksheet Form

line 24 on this year’s tax return as if the

8824 for the part of the property used for

a. You must send, fax, or hand deliver

exchange had been a sale.

business or investment, follow steps (1)

the document you signed to the person

An exchange structured to avoid the

through (3) above only if you can exclude

required to transfer the replacement

related party rules is not a like-kind

at least part of any gain from the

property to you (including a disqualified

exchange. Do not report it on Form 8824.

exchange of that part of the property;

person) or to another person involved in

Instead, you should report the disposition

otherwise, complete the form according to

the exchange (other than a disqualified

of the property given up as if the

its instructions. Enter the combined

person), or

exchange had been a sale. See section

amounts from lines 15 through 25 of both

b. All parties to the exchange must

1031(f)(4). Such an exchange includes

worksheet Forms 8824 on the Form 8824

sign the written agreement designating

the transfer of property you gave up to a

you file. Do not file either worksheet Form

the replacement property.

qualified intermediary in exchange for

8824.

property you received that was formerly

Generally, a disqualified person is

owned by a related party if the related

either your agent at the time of the

More information. For details, see

party received cash or other (not

transaction or a person related to you. For

Rev. Proc. 2005-14, 2005-7 I.R.B. 528,

like-kind) property for the property you

more details, see Regulations section

available at

received, and you used the qualified

1.1031(k)-1(k).

intermediary to avoid the application of

Note. If you received the replacement

the related party rules. See Rev. Rul.

Exchange of stock in a mutual ditch,

property before the end of the 45-day

2002-83 for more details. You can find

reservoir, or irrigation company. The

period, you automatically are treated as

exchange of stock in a mutual ditch,

Rev. Rul. 2002-83 on page 927 of Internal

having met the 45-day written

Revenue Bulletin 2002-49 at

reservoir, or irrigation company may

identification requirement. In this case,

qualify for the nonrecognition of gain or

enter on line 5 the date you received the

loss under section 1031.

Line 11c. If you believe that you can

replacement property.

establish to the satisfaction of the IRS

The nonrecognition of gain or loss on

Line 6. Enter on line 6 the date you

that tax avoidance was not a principal

the exchange may apply if, at the time of

received the like-kind property from the

purpose of both the exchange and the

the exchange:

other party.

disposition, attach an explanation.

1. The company is a section

The property must be received by the

Generally, tax avoidance will not be seen

501(c)(12)(A) organization (determined

earlier of the following dates.

as a principal purpose in the case of:

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without regard to the percentage of

The 180th day after the date you

A disposition of property in a

income collected from members for the

transferred the property given up in the

nonrecognition transaction,

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purpose of meeting losses and

exchange.

An exchange in which the related

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expenses), and

The due date (including extensions) of

parties derive no tax advantage from the

your tax return for the year in which you

shifting of basis between the exchanged

2. The shares of stock in the company

transferred the property given up.

properties, or

have been recognized by the highest

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An exchange of undivided interests in

court in the state in which the company

Line 7. Special rules apply to like-kind

different properties that results in each

was organized or by an applicable statute

exchanges made with related parties,

related party holding either the entire

of that state as constituting or

either directly or indirectly. A related

interest in a single property or a larger

representing real property or an interest in

party includes your spouse, child,

undivided interest in any of the properties.

real property.

grandchild, parent, grandparent, brother,

sister, or a related corporation, S

If, after the exchange, you own

corporation, partnership, trust, or estate.

Additional information. For more

replacement property that a

See section 1031(f).

information on like-kind exchanges, see

related party sold into the

CAUTION

section 1031 and its regulations and Pub.

An exchange made indirectly with a

exchange through an unrelated party

544.

related party includes:

such as a qualified intermediary, you

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2009 Instructions for Form 8824

Instructions For Form 8824 - 2009 Page 2

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