Capital Gains and Losses

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I am preparing Form 8824 for the first time in my life. I…

Good afternoon,I am preparing Form...
Good afternoon,I am preparing Form 8824 for the first time in my life.I have a problem understanding how the number that goes into line 15 should be calculated.Please tell me in PLAIN English what information EXACTLY I should use (add together or subtract, etc) to get the number that goes on line 15.Thank you.
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Answered in 4 minutes by:
3/25/2018
Chad EA, CFP ®
Chad EA, CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional
Category: Capital Gains and Losses
Satisfied Customers: 2,163
Experience: Federally licensed IRS Enrolled Agent, Certified Financial Planner (R), MBA
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Hello!

My name is***** will assist you today. --I have included the instructions for line 15 below. Please let me which part you need assistance with.

Include on line 15 the sum of:

Any cash paid to you by the other party,

The FMV of other (not like-kind) property you received, if any, and Net liabilities assumed by the other party—the excess, if any, of liabilities (including mortgages) assumed by the other party over the total of (a) any liabilities you assumed, (b) cash you paid to the other party, and (c) the FMV of the other (not like-kind) property you gave up.

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Customer reply replied 27 days ago
Chad,I have the IRS instructions and it doesn't make sense to me. Please explain in plain English.There were no mortgages on either closings, there were no other properties involved except the like-kind real property exchange,What does "Any cash paid to you by the other party" mean?
- I did not get paid, the check was received and deposited by the Qualified Intermediary.- Where do I take into account the legal fees, transfer taxes, recording fees, real estate taxes, reimbursement for utilities that were part of both closings, etc?I will appreciate a clear and detailed answer.Thank you in advance

"Any cash paid to you by the other party"--- Some 1031 exchanges include the payments of cash in addition to the exchange of properties. If you did not receive any cash payments from the seller of the second property, then this number will be zero for you.

____

Where do I take into account the legal fees, transfer taxes, recording fees, real estate taxes, reimbursement for utilities that were part of both closings, etc?

These fees are added to your cost basis and depreciated. Real estate taxes and the sum of your utilities are deducted in the year of the expense, generally on Schedule E

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Please let me know if I was able to clarify your question and any follow-up questions you have.

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Customer reply replied 27 days ago
Chad,One more thing to clarify -
The purchase price of the replacement property was $30k less than the selling price of the relinquished property.Two weeks after the 2nd closing, the QI sent me a check for this balance, adjusted for applicable closing expenses for both closings.Is this money what they mean by 'cash received' in instructions for line 15?Thank you very much for your prompt response.

Yes, the $30,000 you received after closing would be reported on line 15 of form 8824.

Please let me know if you have any additional follow up questions.

Chad EA, CFP ®
Chad EA, CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional
Category: Capital Gains and Losses
Satisfied Customers: 2,163
Experience: Federally licensed IRS Enrolled Agent, Certified Financial Planner (R), MBA
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Customer reply replied 23 days ago
Thank you. That addresses my question.
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Chad EA, CFP ®
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Chad EA, CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional
Category: Capital Gains and Losses
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