Instructions For Form 8824 - Like-Kind Exchanges (And Section 1043 Conflict-Of-Interest Sales) - 2017 Page 4

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Section 1043
additional depreciation if you had sold the
3. Report the amount from line 35 on
property (see the Form 4797 instructions
Form 4797, line 10, column (g). In column
Conflict-of-Interest Sales
for line 26), or
(a), write “From Form 8824, line 35.” Don't
(Part IV)
complete columns (b) through (f).
2. The larger of:
If you sell property at a gain according to a
a. The gain shown on line 20, if any,
Line 36. If you sold a capital asset, enter
certificate of divestiture issued by the
or
any capital gain from line 36 on your
Office of Government Ethics (OGE) or the
b. The excess, if any, of the gain in
Schedule D. If you sold property used in a
Judicial Conference of the United States
item (1) above over the FMV of the section
trade or business (or any other asset for
(or its designee) and purchase
1250 property received.
which the gain is treated as ordinary
replacement property (permitted
income), report the gain on Form 4797,
property), you can elect to defer part or all
Section 1252, 1254, and 1255
line 2 or line 10, column (g). In column (a),
of the realized gain. You must recognize
property. The rules for these types of
write “From Form 8824, line 36.” Don't
gain on the sale only to the extent that the
property are similar to those for section
complete columns (b) through (f).
amount realized on the sale is more than
1245 property. See Regulations sections
the cost of replacement property
1.1252-2(d) and 1.1254-2(d) and
Paperwork Reduction Act Notice. We
purchased within 60 days after the sale.
Temporary Regulations section
ask for the information on this form to carry
(You also must recognize any ordinary
16A.1255-2(c) for details. If the installment
out the Internal Revenue laws of the
income recapture.) Permitted property is
method applies to this exchange:
United States. You are required to give us
any obligation of the United States or any
1. See section 453(f)(6) to determine
the information. We need it to ensure that
diversified investment fund approved by
the installment sale income taxable for this
you are complying with these laws and to
the OGE.
year and report it on Form 6252.
allow us to figure and collect the right
If the property you sold was stock
amount of tax.
2. Enter on Form 6252, line 25 or 36,
you acquired by exercising a
the section 1252, 1254, or 1255 recapture
TIP
You are not required to provide the
statutory stock option, you may be
amount you figured on Form 8824, line 21.
information requested on a form that is
treated as meeting the holding periods
Don't enter more than the amount shown
subject to the Paperwork Reduction Act
that apply to such stock, regardless of how
on Form 6252, line 24 or 35.
unless the form displays a valid OMB
long you actually held the stock. This may
3. Also enter this amount on Form
control number. Books or records relating
benefit you if you don't defer your entire
4797, line 15.
to a form or its instructions must be
gain, because it may allow you to treat the
retained as long as their contents may
4. If all the ordinary income isn't
gain as a capital gain instead of ordinary
become material in the administration of
recaptured this year, report in future years
income. For details, see section 421(d) or
any Internal Revenue law. Generally, tax
on Form 6252 the ordinary income up to
Pub. 525, Taxable and Nontaxable
returns and return information are
the taxable installment sale income, until it
Income.
confidential, as required by section 6103.
is all reported.
Complete Part IV of Form 8824 only if
The time needed to complete and file
Line 22. Report a gain from the exchange
the cost of the replacement property is
this form will vary depending on individual
of property used in a trade or business
more than the basis of the divested
circumstances. The estimated burden for
(and other noncapital assets) on Form
property and you elect to defer the gain.
individual taxpayers filing this form is
4797, line 5 or line 16. Report a gain from
Otherwise, report the sale on your
approved under OMB control number
the exchange of capital assets according
Schedule D or Form 4797, whichever
1545-0074 and is included in the
to the Schedule D instructions for your
applies.
estimates shown in the instructions for
return. Be sure to use the date of the
their individual income tax return. The
Your basis in the replacement property
exchange as the date for reporting the
estimated burden for all other taxpayers
is reduced by the amount of the deferred
gain. If the installment method applies to
who file this form is shown below.
gain. If you made more than one purchase
this exchange, see section 453(f)(6) to
of replacement property, reduce your
determine the installment sale income
basis in the replacement property in the
taxable for this year and report it on Form
Recordkeeping
10 hr., 16 min.
. . . .
order you acquired it.
6252.
Learning about
Line 30. Enter the amount you received
the law or the
Line 24. If line 19 is a loss, enter it on
from the sale of the divested property,
form
1 hr., 59 min.
line 24. Otherwise, subtract the amount on
. . . . . . . . . . . .
minus any selling expenses.
line 23 from the amount on line 19 and
Preparing the
enter the result. For exchanges with
form
2 hr., 14 min.
Line 35. Follow these steps to determine
. . . . . . . . . . . .
related parties, see the instructions for
the amount to enter.
Line
7, earlier.
1. Use Part III of Form 4797 as a
Line 25. The amount on line 25 is your
worksheet to figure ordinary income under
If you have comments concerning the
basis in the like-kind property you
the recapture rules.
accuracy of these time estimates or
received in the exchange. Your basis in
suggestions for making this form simpler,
2. Enter on Form 8824, line 35, the
other property received in the exchange, if
we would be happy to hear from you. See
amount from Form 4797, line 31. Don't
any, is its FMV.
the instructions for the tax return with
attach the Form 4797 used as a worksheet
which this form is filed.
to your return.
2017 Instructions for Form 8824
-4-

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