I am a limited partner in an LLC that completed a 1031 exchange. Do I have to file form 8824 (like-kind exchange) in my federal taxes?

Forum|Forum|2 years ago
October 14, 2023
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I am a limited partner in a real estate syndication that completed a 1031 exchange this year. I received K-1 forms from the LLCs involved in the exchange.

Wondering should I enter them in some special way in my personal tax return.

Thank you!

Best answer by Anonymous_

The exchange is reported by the entity.

You would enter the K-1 information from the LLC but not the 8824.

Anonymous_Answer

Employee

The exchange is reported by the entity.

You would enter the K-1 information from the LLC but not the 8824.

ghettodawgAuthor

Thank you so much for the clear answer!

I have one more related question (who doesnt here 🙂 , I hope this answer will be of help both to me and others:

The exchanged-from investment has accumulated a loss from rental activities of ~50k over the last few years; these passsive losses have been accumulating on form 8582 in my federal returns. Now I have a "final" K-1 form from them (but note that they are doing a 1031 exchange).

Ideally I want to "take" that loss in this year, which would reduce the proffit from my active rental activities (yes, I have such profits!).

In Turbotax desktop, when I check the box "This partnership ended in 2022", on the next screen the help page says: "If a passive activity or former passive activity is involved in a like-kind exchange, the activity should NOT be considered fully disposed of, and current year losses and passive carryovers are still subject to the passive activity loss rules".

Based, on that text, I cannot "take" any of the $50k loss in this year. So it will be carried over to future years, yes? What is the idea with that: will I ever be able to "take" some of that passive loss?

Thank you!