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Page 2 of 4 2011 Instructions for Form 8824

9:25 - 12-SEP-2011

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

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Revenue Bulletin 2000-40 at

2. The shares of stock in the company

The due date (including extensions) of

have been recognized by the highest

your tax return for the year in which you

Rev. Proc. 2004-51, 2004-33 I.R.B. 294,

court in the state in which the company

transferred the property given up.

is available at

was organized or by an applicable statute

Line 7. Special rules apply to like-kind

of that state as constituting or

exchanges made with related parties,

representing real property or an interest in

Property used as home. If the property

either directly or indirectly. A related

real property.

given up was owned and used as your

party includes your spouse, child,

home during the 5-year period ending on

grandchild, parent, grandparent, brother,

Additional information. For more

the date of the exchange, you may be

sister, or a related corporation, S

information on like-kind exchanges, see

able to exclude part or all of any gain

corporation, partnership, trust, or estate.

section 1031 and its regulations and Pub.

figured on Form 8824. For details on the

See section 1031(f).

544.

exclusion (including how to figure the

An exchange made indirectly with a

amount of the exclusion), see Pub. 523,

related party includes:

Selling Your Home. Fill out Form 8824

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Specific Instructions

An exchange made with a related party

according to its instructions, with these

through an intermediary (such as a

exceptions:

qualified intermediary or an exchange

Lines 1 and 2. For real property, enter

1. Subtract line 18 from line 17. Enter

accommodation titleholder, as defined in

the address and type of property. For

that result on line 19. On the dotted line

Pub. 544), or

personal property, enter a short

next to line 19, enter “Section 121

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An exchange made by a disregarded

description. For property located outside

exclusion” and the amount of the

entity (such as a single member limited

the United States, include the country.

exclusion.

liability company) if you or a related party

Line 5. Enter on line 5 the date of the

2. On line 20, enter the smaller of:

owned that entity.

written identification of the like-kind

a. Line 15 minus the exclusion, or

If you or the related party (either

property you received in a deferred

b. Line 19.

directly or indirectly) dispose of property

exchange. To comply with the 45-day

Do not enter less than zero.

received in an exchange before the date

written identification requirement, the

3. Subtract line 15 from the sum of

that is 2 years after the last transfer which

following conditions must be met.

lines 18 and 23. Add the amount of your

was part of the exchange, the deferred

1. The like-kind property you receive

exclusion to the result. Enter that sum on

gain or (loss) from line 24 must be

in a deferred exchange is designated in

line 25.

reported on your return for the year of

writing as replacement property either in a

disposition (unless an exception on line

document you signed or in a written

Property used partly as home. If the

11 applies).

agreement signed by all parties to the

property given up was used partly as a

exchange.

If you are filing this form for 1 of the 2

home, you will need to use two separate

2. The document or agreement

years following the year of the exchange,

Forms 8824 as worksheets — one for the

describes the replacement property in a

complete Parts I and II. If both lines 9 and

part of the property used as a home and

clear and recognizable manner. Real

10 are “No,” stop.

one for the part used for business or

property should be described using a

investment. Fill out only lines 15 through

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

legal description, street address, or

25 of each worksheet Form 8824. On the

an exception on line 11 applies, check the

distinguishable name (for example,

worksheet Form 8824 for the part of the

applicable box on line 11, attach any

“Mayfair Apartment Building”).

property used as a home, follow steps (1)

required explanation, and stop. If no line

3. No later than 45 days after the date

through (3) above, except that instead of

11 exceptions apply, complete Part III.

you transferred the property you gave up:

following step (2), enter the amount from

Report the deferred gain or (loss) from

a. You send, fax, or hand deliver the

line 19 on line 20. On the worksheet Form

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

document you signed to the person

8824 for the part of the property used for

exchange had been a sale.

required to transfer the replacement

business or investment, follow steps (1)

property to you (including a disqualified

An exchange structured to avoid the

through (3) above only if you can exclude

person) or to another person involved in

related party rules is not a like-kind

at least part of any gain from the

exchange. Do not report it on Form 8824.

the exchange (other than a disqualified

exchange of that part of the property;

person), or

Instead, you should report the disposition

otherwise, complete the form according to

b. All parties to the exchange sign the

of the property given up as if the

its instructions. Enter the combined

written agreement designating the

exchange had been a sale. See section

amounts from lines 15 through 25 of both

replacement property.

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

worksheet Forms 8824 on the Form 8824

the transfer of property you gave up to a

you file. Do not file either worksheet Form

Generally, a disqualified person is

qualified intermediary in exchange for

8824.

either your agent at the time of the

property you received that was formerly

More information. For details, see

transaction or a person related to you. For

owned by a related party if the related

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

more details, see Regulations section

party received cash or other (not

available at

1.1031(k)-1(k).

like-kind) property for the property you

received, and you used the qualified

Note. If you received the replacement

Exchange of stock in a mutual ditch,

intermediary to avoid the application of

property before the end of the 45-day

reservoir, or irrigation company. The

the related party rules. See Rev. Rul.

period, you automatically are treated as

exchange of stock in a mutual ditch,

2002-83 for more details. You can find

having met the 45-day written

reservoir, or irrigation company may

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

identification requirement. In this case,

qualify for the nonrecognition of gain or

Revenue Bulletin 2002-49 at

enter on line 5 the date you received the

loss under section 1031.

replacement property.

The nonrecognition of gain or loss on

Line 11c. If you believe that you can

Line 6. Enter on line 6 the date you

the exchange may apply if, at the time of

establish to the satisfaction of the IRS

received the like-kind property from the

the exchange:

that tax avoidance was not a principal

other party.

1. The company is a section

purpose of both the exchange and the

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

The property must be received by the

disposition, attach an explanation.

without regard to the percentage of

earlier of the following dates.

Generally, tax avoidance will not be seen

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income collected from members for the

The 180th day after the date you

as a principal purpose in the case of:

•

purpose of meeting losses and

transferred the property given up in the

A disposition of property in a

expenses), and

exchange.

nonrecognition transaction,

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2011 Instructions for Form 8824

Instructions For Form 8824 - Like-Kind Exchanges (And Section 1043 Conflict-Of-Interest Sales) - 2011 Page 2

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