OMB No. 1545-1190 Like-Kind Exchanges

Form 8824

(and section 1043 conflict-of-interest sales)

Department of the Treasury

Internal Revenue Service  Attach to your tax return. Attachment

Sequence No. 109

Name(s) shown on tax return Identifying number

Information on the Like-Kind Exchange

1 Description of like-kind property given up 

2 Description of like-kind property received 

3 Date like-kind property given up was originally acquired (month, day, year) 3 / /

4 Date you actually transferred your property to other party (month, day, year) 4 / /

5 / /

Date like-kind property you received was identified by written notice to another party (see

instructions for 45-day written notice requirement) (month, day, year)

5

6 Date you actually received the like-kind property from other party (month, day, year) (see instructions) 6 / /

7 Was the exchange of the property given up or received made with a related party, either directly or indirectly

(such as through an intermediary) (see instructions)? If “Yes,” complete Part II. If “No,” go to Part III

8 Name of related party Related party’s identifying number

Address (no., street, and apt., room, or suite no., city or town, state, and ZIP code)

Relationship to you

During this tax year (and before the date that is 2 years after the last transfer of property that was part of the

exchange), did the related party directly or indirectly (such as through an intermediary) sell or dispose of any

part of the like-kind property received from you in the exchange?

9

During this tax year (and before the date that is 2 years after the last transfer of property that was part of the

exchange), did you sell or dispose of any part of the like-kind property you received?

10

If both lines 9 and 10 are “No” and this is the year of the exchange, go to Part III. If both lines 9 and 10 are “No” and this is not the

year of the exchange, stop here. If either line 9 or line 10 is “Yes,” complete Part III and report on this year’s tax return the deferred

gain or (loss) from line 24 unless one of the exceptions on line 11 applies.

11 If one of the exceptions below applies to the disposition, check the applicable box:

The disposition was after the death of either of the related parties.

The disposition was an involuntary conversion, and the threat of conversion occurred after the exchange.

You can establish to the satisfaction of the IRS that neither the exchange nor the disposition had tax avoidance as its

principal purpose. If this box is checked, attach an explanation (see instructions).

Caution: If you transferred and received (a) more than one group of like-kind properties or (b) cash or other (not like-kind) property,

see Reporting of multi-asset exchanges in the instructions.

Note: Complete lines 12 through 14 only if you gave up property that was not like-kind. Otherwise, go to line 15.

12 Fair market value (FMV) of other property given up 12

13 Adjusted basis of other property given up 13

Gain or (loss) recognized on other property given up. Subtract line 13 from line 12. Report the

gain or (loss) in the same manner as if the exchange had been a sale

14

14

15 Cash received, FMV of other property received, plus net liabilities assumed by other party, reduced

(but not below zero) by any exchange expenses you incurred (see instructions) 15

16 FMV of like-kind property you received 16

17 Add lines 15 and 16 17

Adjusted basis of like-kind property you gave up, net amounts paid to other party, plus any

exchange expenses not used on line 15 (see instructions)

18

18

19 Realized gain or (loss). Subtract line 18 from line 17 19

20 Enter the smaller of line 15 or line 19, but not less than zero 20

21 Ordinary income under recapture rules. Enter here and on Form 4797, line 16 (see instructions) 21

Basis of like-kind property received. Subtract line 15 from the sum of lines 18 and 23

22

22

For Paperwork Reduction Act Notice, see page 4. Cat. No. 12311A Form 8824 (2003)

Part I

Yes No

Yes No

Realized Gain or (Loss), Recognized Gain, and Basis of Like-Kind Property Received

Note: If the property described on line 1 or line 2 is real or personal property located outside the United States, indicate the country.

23

24 Deferred gain or (loss). Subtract line 23 from line 19. If a related party exchange, see instructions

Subtract line 21 from line 20. If zero or less, enter -0-. If more than zero, enter here and on Schedule

D or Form 4797, unless the installment method applies (see instructions)

Recognized gain. Add lines 21 and 22

25

23

24

25

a

b

c

Part III

Part II Related Party Exchange Information

2003

Yes No
Form 8824 (2003) Page 2

Deferral of Gain From Section 1043 Conflict-of-Interest Sales

Description of divested property 

Description of replacement property 

Date divested property was sold (month, day, year) 29 / /

Sales price of divested property (see instructions) 30

26

31

27

Basis of divested property

Realized gain. Subtract line 31 from line 30

28

33

29

Cost of replacement property purchased within 60 days after date

of sale

30

34

31

Ordinary income under recapture rules. Enter here and on Form 4797, line 10 (see instructions)

Basis of replacement property. Subtract line 37 from line 33

32

35

Note: This part is to be used only by officers or employees of the executive branch of the Federal Government for reporting

nonrecognition of gain under section 1043 on the sale of property to comply with the conflict-of-interest requirements. This

part can be used only if the cost of the replacement property exceeds the basis of the divested property.

Name(s) shown on tax return. Do not enter name and social security number if shown on other side. Your social security number

33

34

35

36

37

38

Subtract line 33 from line 30. If zero or less, enter -0-

Subtract line 35 from line 34. If zero or less, enter -0-. If more than zero, enter here and on

Schedule D or Form 4797 (see instructions)

Deferred gain. Subtract the sum of lines 35 and 36 from line 32

36

Part IV

Form 8824 (2003)

Enter the number from the upper right corner of your certificate of divestiture. (Do not attach a

copy of your certificate. Keep the certificate with your records.) 

37

38

32

Section references are to the Internal

Revenue Code unless otherwise noted.

General Instructions

Purpose of Form

Use Parts I, II, and III of Form 8824 to

report each exchange of business or

investment property for property of a like

kind. Certain members of the executive

branch of the Federal Government use Part

IV to elect to defer gain on conflictof-interest sales.

If during the current tax year you

transferred property to another party in a

like-kind exchange, you must file Form

8824 with your tax return for that year.

Also file Form 8824 for the 2 years

following the year of a related party

exchange (see the instructions for line 7 on

page 3).

Like-Kind Exchanges

Generally, if you exchange business or

investment property solely for business or

investment property of a like kind, no gain

or loss is recognized under section 1031.

If, as part of the exchange, you also

receive other (not like-kind) property or

money, gain is recognized to the extent of

the other property and money received,

but a loss is not recognized.

Section 1031 does not apply to

exchanges of inventory, stocks, bonds,

notes, other securities or evidence of

indebtedness, or certain other assets. See

section 1031(a)(2).

Multiple exchanges. If you made more

than one like-kind exchange, you may file

only a summary Form 8824 and attach

your own statement showing all the

information requested on Form 8824 for

each exchange. Include your name and

identifying number at the top of each page

of the statement. On the summary Form

8824, enter only your name and identifying

number, “Summary” on line 1, the total

recognized gain from all exchanges on line

23, and the total basis of all like-kind

property received on line 25.

Real properties generally are of like kind,

regardless of whether they are improved or

unimproved. However, real property in the

United States and real property outside the

United States are not like-kind properties.

When To File

–

Deferred exchanges. A deferred exchange

occurs when the property received in the

exchange is not received at the same time

as the transfer of the property given up.

For a deferred exchange to qualify as

like-kind, you must comply with the 45-day

written notice and receipt requirements

explained in the instructions for lines 5

and 6.

Like-kind property. Properties are of like

kind if they are of the same nature or

Multi-asset exchanges. A multi-asset

exchange involves the transfer and receipt

of more than one group of like-kind

properties. For example, an exchange of

character, even if they differ in grade or

quality. Personal properties of a like class

are like-kind properties. However, livestock

of different sexes are not like-kind

properties. Also, personal property used

predominantly in the United States and

personal property used predominantly

outside the United States are not like-kind

properties. See Pub. 544, Sales and Other

Dispositions of Assets, for more details.
Form 8824 (2003) Page 3

Reporting of multi-asset exchanges. If

you transferred and received (a) more than

one group of like-kind properties or

(b) cash or other (not like-kind) property,

do not complete lines 12 through 18 of

Form 8824. Instead, attach your own

statement showing how you figured the

realized and recognized gain, and enter the

correct amount on lines 19 through 25.

Report any recognized gains on Schedule

D, Form 4797, Sales of Business Property,

or Form 6252, Installment Sale Income,

whichever applies.

Lines 1 and 2. For real property, enter the

address and type of property. For personal

property, enter a short description. For

property located outside the United States,

include the country.

Line 7. Special rules apply to like-kind

exchanges made with related parties,

either directly or indirectly. A related party

includes your spouse, child, grandchild,

parent, grandparent, brother, sister, or a

related corporation, S corporation,

partnership, trust, or estate. See section

1031(f).

Line 11c. If you believe that you can

establish to the satisfaction of the IRS that

tax avoidance was not a principal purpose

of both the exchange and the disposition,

attach an explanation. See Pub. 537,

Installment Sales, for exceptions where tax

avoidance is not a principal purpose.

Lines 12, 13, and 14. If you gave up other

property in addition to the like-kind

property, enter the fair market value (FMV)

and the adjusted basis of the other

property on lines 12 and 13, respectively.

The gain or (loss) from this property is

figured on line 14 and must be reported on

your return. Report gain or (loss) as if the

exchange were a sale.

Line 15. Include on line 15 the sum of the

following:

● Any cash paid to you by the other party,

Specific Instructions

● 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.

● A nonrecourse liability generally is

treated as assumed by the party receiving

the property subject to the liability.

However, if an owner of other assets

subject to the same liability agrees with the

party receiving the property to, and is

expected to, satisfy part or all of the

liability, the amount treated as assumed is

reduced by the smaller of (a) the amount

of the liability that the owner of the other

assets has agreed to and is expected to

satisfy or (b) the FMV of those other

assets.

Reduce the sum of the above amounts

(but not below zero) by any exchange

expenses you incurred. See the example

on page 4.

The following rules apply in determining

the amount of liability treated as assumed.

● A recourse liability (or portion thereof) is

treated as assumed by the party receiving

the property if that party has agreed to and

is expected to satisfy the liability (or

portion thereof). It does not matter whether

the party transferring the property has

been relieved of the liability.

Additional information. For more

information on like-kind exchanges, see

section 1031 and its regulations and Pub.

544.

Line 5. Enter on line 5 the date of the

written notice that identifies the like-kind

property you received in a deferred

exchange. To comply with the 45-day

written notice requirement, the following

conditions must be met:

● The like-kind property you receive in a

deferred exchange must be designated in

writing as replacement property either in a

document you signed or in a written

agreement signed by all parties to the

exchange.

● The document or agreement must

describe the replacement property in a

clear and recognizable manner. Real

property should be described using a legal

description, street address, or

distinguishable name (e.g., “Mayfair

Apartment Building”).

● No later than 45 days after the date you

transferred the property you gave up:

2. All parties to the exchange must sign

the written agreement designating the

replacement property.

Generally, a disqualified person is either

your agent at the time of the transaction or

a person related to you. For more details,

see Regulations section 1.1031(k)-1(k).

Note. If you received the replacement

property before the end of the 45-day

period, you automatically are treated as

having met the 45-day written notice

requirement. In this case, enter on line 5

the date you received the replacement

property.

Line 6. Enter on line 6 the date you

received the like-kind property from the

other party. The property must be received

by the earlier of the following dates:

● The 180th day after the date you

transferred the property given up in the

exchange.

● The due date (including extensions) of

your tax return for the year in which you

transferred the property given up.

If the related party (either directly or

indirectly) or you dispose of the property

received in an exchange before the date

that is 2 years after the last transfer of

property from the exchange, the deferred

gain or (loss) from line 24 must be reported

on your return for the year of disposition

(unless an exception on line 11 applies).

If you are filing this form for 1 of the 2

years following the year of the exchange,

complete Parts I and II. If both lines 9 and

10 are “No,” stop. If either line 9 or line 10

is “Yes,” and an exception on line 11

applies, check the applicable box on line

11, attach any required explanation, and

stop. If no line 11 exceptions apply,

complete Part III. Report the deferred gain

or (loss) from line 24 on this year’s tax

return as if the exchange had been a sale.

An exchange structured to avoid the

related party rules is not a like-kind

exchange and may not be reported on

Form 8824. See section 1031(f)(4). Such an

exchange includes the transfer of property

you gave up to a qualifed intermediary in

exchange for property you received that

was formerly owned by a related party if

the related party received cash or other

(not like-kind) property for the property you

received. See Rev. Rul. 2002-83, 2002-49

I.R.B. 927, for more details. You can find

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

Revenue Bulletin 2002-49 at

www.irs.gov/pub/irs-irbs/irb02-49.pdf.

1. You must send, fax, or hand deliver

the document you signed to the person

required to transfer the replacement

property to you (including a disqualified

person) or to another person involved in

the exchange (other than a disqualified

person) or

Line 18. Include on line 18 the sum of:

● Net amount paid to the other party—the

excess, if any, of 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

over any liabilities assumed by the other

party.

See Regulations section 1.1031(d)-2 and

the following example for figuring amounts

to enter on lines 15 and 18.

● The adjusted basis of the like-kind

property you gave up,

● Exchange expenses, if any (except for

expenses used to reduce the amount

reported on line 15), and

land, vehicles, and cash for land and

vehicles is a multi-asset exchange. An

exchange of land, vehicles, and cash for

land only is not a multi-asset exchange.

The transfer or receipt of multiple

properties within one like-kind group is

also a multi-asset exchange. Special rules

apply when figuring the amount of gain

recognized and your basis in properties

received in a multi-asset exchange. For

details, see Regulations section 1.1031(j)-1.

● An exchange made with a related party

through an intermediary (such as a

qualified intermediary or an exchange

accommodation titleholder, as defined in

Pub. 544) or

● An exchange made by a disregarded

entity (such as a single member limited

liability company) if you or a related party

owned that entity.

An exchange made indirectly with a

related party includes:
Form 8824 (2003) Page 4

Section 1252, 1254, and 1255 property.

The rules for these types of property are

similar to those for section 1245 property.

See Regulations section 1.1252-2(d) and

Temporary Regulations section

16A.1255-2(c) for details. If the installment

method applies to this exchange:

1. See section 453(f)(6) to determine the

installment sale income taxable for this

year and report it on Form 6252.

2. Enter on Form 6252, line 25 or 36, the

section 1252, 1254, or 1255 recapture

amount you figured on Form 8824, line 21.

Do not enter more than the amount shown

on Form 6252, line 24 or 35.

4. If all the ordinary income is not

recaptured this year, report in future years

on Form 6252 the ordinary income up to

the taxable installment sale income, until it

is all reported.

Line 22. Report a gain from the exchange

of property used in a trade or business

(and other noncapital assets) on Form

4797, line 5, column (g), and if applicable,

column (h), or line 16. Report a gain from

the exchange of capital assets according

to the Schedule D instructions for your

return. Be sure to use the date of the

exchange as the date for reporting the

gain. If the installment method applies to

this exchange, see section 453(f)(6) to

determine the installment sale income

taxable for this year and report it on Form

6252.

Line 24. If line 19 is a loss, enter it on line

24. Otherwise, subtract the amount on line

23 from the amount on line 19 and enter

the result. For exchanges with related

parties, see the instructions for line 7 on

page 3.

Line 25. The amount on line 25 is your

basis in the like-kind property you received

in the exchange. Your basis in other

property received in the exchange, if any,

is its FMV.

If you sell property at a gain according to a

certificate of divestiture issued by the

Office of Government Ethics (OGE) and

purchase replacement property (permitted

property), you may elect to defer part or all

of the realized gain. You must recognize

gain on the sale only to the extent that the

amount realized on the sale exceeds the

cost of replacement property purchased

within 60 days after the sale (you must

also recognize any ordinary income

recapture). Permitted property is any

obligation of the United States or any

diversified investment fund approved by

the OGE.

Complete Part IV of Form 8824 only if

the cost of the replacement property

exceeds the basis of the divested property

and you elect to defer the gain. Otherwise,

report the sale on Schedule D or Form

4797, whichever applies.

Line 30. Enter the amount you received

from the sale of the divested property,

minus any selling expenses.

Line 35. Follow these steps to determine

the amount to enter.

2. Enter on Form 8824, line 35, the

amount from Form 4797, line 31. Do not

attach the Form 4797 used as a worksheet

to your return.

Line 36. If you sold a capital asset, enter

any gain from line 36 on Schedule D. If you

sold property used in a trade or business

(or any other noncapital asset), report the

gain on Form 4797, line 2, column (g), and

if applicable, column (h), or line 10, column

(g). In column (a), write “From Form 8824,

line 36.” Do not complete columns (b)

through (f).

3. Also enter this amount on Form 4797,

line 15.

Section 1043

Conflict-of-Interest Sales

(Part IV)

1. Use Part III of Form 4797 as a

worksheet to figure ordinary income under

the recapture rules.

3. Report the amount from line 35 on

Form 4797, line 10, column (g). In column

(a), write “From Form 8824, line 35.” Do

not complete columns (b) through (f).

Your basis in the replacement property

is reduced by the amount of the deferred

gain. If you made more than one purchase

of replacement property, reduce your basis

in the replacement property in the order it

was acquired.

Paperwork Reduction Act Notice. We

ask for the information on this form to

carry out the Internal Revenue laws of the

United States. You are required to give us

the information. We need it to ensure that

you are complying with these laws and to

allow us to figure and collect the right

amount of tax.

You are not required to provide the

information requested on a form that is

subject to the Paperwork Reduction Act

unless the form displays a valid OMB

control number. Books or records relating

to a form or its instructions must be

retained as long as their contents may

become material in the administration of

any Internal Revenue law. Generally, tax

returns and return information are

confidential, as required by section 6103.

The time needed to complete and file

this form will vary depending on individual

circumstances. The estimated average time

is:

Recordkeeping 1 hr., 38 min.

Learning about the

law or the form 27 min.

Preparing the form 59 min.

Copying, assembling, and

sending the form to the IRS 33 min.

If you have comments concerning the

accuracy of these time estimates or

suggestions for making this form simpler,

we would be happy to hear from you. See

the instructions for the tax return with

which this form is filed.

B enters $30,000 on line 15—the excess

of the $150,000 of liabilities assumed by A

over the total ($120,000) of the $80,000 of

liabilities B assumed and the $40,000 cash

B paid. B enters on line 18 only the

adjusted basis of $175,000 because the

total of the $80,000 of liabilities B assumed

and the $40,000 cash B paid does not

exceed the $150,000 of liabilities assumed

by A.

Line 21. If you disposed of section 1245,

1250, 1252, 1254, or 1255 property (see

the instructions for Part III of Form 4797),

you may be required to recapture as

ordinary income part or all of the realized

gain (line 19). Figure the amount to enter

on line 21 as follows:

A transfers his apartment house to B

and receives in exchange B’s apartment

house plus $40,000 cash. A assumes the

mortgage on the apartment house received

from B, and B assumes the mortgage on

the apartment house received from A.

A enters on line 15 only the $40,000

cash received from B. The $80,000 of

liabilities assumed by B is not included

because it does not exceed the $150,000

of liabilities A assumed. A enters $170,000

on line 18—the $100,000 adjusted basis,

plus the $70,000 excess of the liabilities A

assumed over the liabilities assumed by B

($150,000 - $80,000).

Example. A owns an apartment house

with an FMV of $220,000, an adjusted

basis of $100,000, and subject to a

mortgage of $80,000. B owns an

apartment house with an FMV of $250,000,

an adjusted basis of $175,000, and subject

to a mortgage of $150,000.

Section 1245 property. Enter the smaller

of:

1. The total adjustments for deductions

(whether for the same or other property)

allowed or allowable to you or any other

person for depreciation or amortization (up

to the amount of gain shown on line 19) or

2. The gain shown on line 20, if any,

plus the FMV of non-section 1245 like-kind

property received.

Section 1250 property. Enter the smaller

of:

1. The gain you would have had to

report as ordinary income because of

additional depreciation if you had sold the

property (see the Form 4797 instructions

for line 26) or

2. The larger of:

● The gain shown on line 20, if any, or

● The excess, if any, of the gain in 1

above over the FMV of the section 1250

property received.