California form 8824

Forum|Forum|2 years ago
April 8, 2023
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I did 1031 exchange on 2022. I only need to file federal form 4797 for 1031 exchange boot. It seems CA TurboTax generated CA 8824 and California schedule D-1( sales of business property) for California adjustments. It looks like CA capital gain are double counted. Not sure why I have both (8824 and schedule D-1).

MonikaK1

Use Form 8824, Like-Kind Exchanges, on the Federal return to report exchanges of qualifying business or investment real property for real property of a like kind. For exchanges of real property used in a trade or business (and other noncapital assets), enter the gain or (loss) from Form 8824, if any, on Form 4797, line 5 or line 16. See IRS instructions for Form 4797

Does your California return have Form 3840? That form is required if both of the following occur:

An exchange of one or more California real properties for one or more real properties located outside of California
Any portion of the California sourced realized gain or loss is not recognized

If required, taxpayers must file FTB 3840 in the year of the exchange and each year after until the deferred gain or loss is recognized.

California generally conforms to Federal IRC section 1031. Can you clarify whether and how the transaction is treated differently on your Federal and State returns?

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gr3849

Hi, MoniKak1

I have a question about California 8824. Both of my 1031 exchange properties are located in California. After completing my federal tax return and starting My CA return, the 8824 form also shown up in the CA returns. When I tried to revisit the line " like-kind exchanges" in the "Investments" section of my CA return, a page show up asking me to " Enter the amount of gain required to be recognized as ordinary income (aka recapture amount), if applicable".

I spend more than 5 hours talked to 4 different "experts" in the TT support team, nobody give me an answer as what number to put there even though I went through my completed federal 8824 form line by line with each of them. Note that this question never show up in the federal 8824 questionary or form. It only shown up when the form was flow to CA return.

Please shine any light about what the TT is really asking and where to get that number or how to figure out what is the correct number to put there. I appreciate your time to help.

Thanks

Jerry