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 (month, day, year) (see instructions) 5 / /

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

7 Was the exchange made with a related party (see instructions)? If “Yes,” complete Part II. If “No,” go to Part III.

Yes, in this tax year No

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 sell or dispose 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 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. See Related party exchanges in the instructions.

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 (2002)

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.

a b c Yes, in a prior tax year

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

2002
Form 8824 (2002) 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 (2002)

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 Related party

exchanges 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).

Like-kind property. Properties are of

like kind if they are of the same nature

or 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.

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:
Form 8824 (2002) Page 3

● Receive the new property by the

earlier of (a) 180 days after the date you

transferred the property given up or

(b) the due date (including extensions) of

your tax return for the year in which you

transferred the property given up.

You identify replacement property by

notifying, in writing, another party to the

exchange (other than a related party) of

your selection of the property.

Identification may also be made in a

written agreement for the exchange of

properties.

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 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.

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.

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 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

related party rules is not a like-kind

exchange. See section 1031(f)(4).

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 5. See Deferred exchanges

beginning on page 2.

Line 7. See Related party exchanges

on this page.

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,

If either you or the related party

disposes of 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).

Specific Instructions

● The FMV of other (not like-kind)

Related party exchanges. Special rules property you received, if any, and

apply to like-kind exchanges made with

related parties. A related party includes

your spouse, child, grandchild, parent,

brother, or sister; or a related

corporation, S corporation, partnership,

or trust. See section 1031(f).

● 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.

See Rev. Proc. 2000-37, 2000-2 C.B.

308, for special rules that apply to

property held in a qualified exchange

accommodation arrangement (QEAA).

You can find Rev. Proc. 2000-37 on page

308 of Internal Revenue Bulletin 2000-40

at www.irs.gov/pub/irs-irbs/irb00-40.pdf. 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.

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.

● 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

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).

● 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 below.

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.

● Identify the replacement property you

receive no later than 45 days after the

date you transferred the property given

up and

Additional information. For more

information on like-kind exchanges, see

section 1031 and its regulations and

Pub. 544.
Form 8824 (2002) Page 4

● The rules for section 1252, 1254, and

1255 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 or 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 Related party

exchanges 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 or

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 25 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:

● For section 1245 property, enter the

smaller of (a) 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 the

gain shown on line 19) or (b) any gain

shown on line 20 plus the FMV of

non-section 1245 like-kind property

acquired.

● For section 1250 property, enter the

larger of (a) the excess, if any, of the

gain you would have had to report as

ordinary income because of additional

depreciation (see the Form 4797

instructions for line 26) if you had sold

the property over the FMV

of the section 1250 property acquired or

(b) any gain shown on line 20.