1. What do I get if I use the IRS Form 8824 generator?
2. Is the IRS Form 8824 really that difficult?
3. What if I read the "help" screens and I am still confused? What if I have a difficult tax situation?
4. "Sum of Liabilities" what does that mean?
5. You only list a few categories on the input form. There are lots of entries on my Settlement Statement. What am I supposed to do?
6. With this handle multiple properties?
7. Why did you build this Form 8824 Generator program?
8. Why can't my Qualified Intermediary (1031 Exchange Company, like 1031x.com) complete this form for me?
1. What do I get if I use the IRS Form 8824 generator?
The IRS Form 8824 Generator lets you enter the information from your settlement statements, and this information is then used to help you understand some of the calculations needed for the IRS Form 8824. Only a tax professional is qualified to give you advice about your taxes.
2. Is the IRS Form 8824 really that difficult?
Frankly, yes. While the concept is simple--buy for equal or greater and defer your taxes--the terms used in the Form 8824 are often ambiguous. We really had to delve into the directions the IRS provides to ensure that the proper questions lead to the right input. Of course, the form is dependent on your input! It is important that you read each "help" screen associated with the question.
3. What if I read the "help" screens and I am still confused? What if I have a difficult tax situation?
Despite our best efforts to simplify things, sometimes life just gets complicated! A tax professional is the best person to consult about your questions. It is important to file correctly, so get the help you need! This form is limited to your understanding of the terms. When you are well-versed in 1031 exchange tax rules, it can be a helpful calculator.
4. "Sum of Liabilities" what does that mean?
Well, liabilities are essentially defined as debts you have agreed to take on, or that the buyer of your property has agreed to take on for you. For instance, say you owe $2000 in taxes on the property you sell and, in lieu of cash, the buyer agrees to pay that bill. That would be a liability that was "taken over by the buyer" on the sale of your relinquished property.
5. You only list a few categories on the input form. There are lots of entries on my Settlement Statement. What am I supposed to do?
It is impossible to handle all the many different entries on each settlement statement, so they need to be grouped according to their category. If you have both a first and second mortgage on the property--sum them up! If you have a tax bill and a water credit--subtract the water credit from the tax bill and enter the result a "Sum of Liabilities."
6. With this handle multiple properties?
It will handle multiple properties. The IRS still asks you to attach a worksheet which shows the detail information for each property. We hope our detail sheets will provide you with a good summary of information to build these worksheets.
7. Why did you build this Form 8824 Generator program?
Thousands of our clients in the past 17 years have happily completed their 1031 exchanges, only to be frustrated by this seemingly simple two page tax form. While our clients our savvy real estate investors, they don't usually fill out this tax form everyday. Even talented CPAs call us for the occasional "assist" when completing this form. While its concept is fairly straight-forward (buy for equal or greater, and pay taxes on the difference), somehow that gets a little confusing with the IRS wording. We hope that this will be of help to our clients and many others who complete 1031 exchanges each year.
8. Why can't my Qualified Intermediary (1031 Exchange Company, like 1031x.com) complete this form for me?
Your 1031 Exchange company has only part of the information required to complete this form. You have both the final settlement statements and your tax records showing depreciation, etc. In the final analysis, it is the part of the exchanger's tax form. The qualified intermediary is an third party, and should not be an agent of the exchanger. Please ask a qualified tax professional for assistance if you have questions about this form. It is important to file your taxes correctly!!