4/6/2024 0 Comments Irs form 8824 worksheetPart I of Form 8824 is where you provide details about the old property and the new property.When completing the form, it’s important to keep the following in mind: The $10,000 gain will be factored into the tax calculation when you eventually sell the new property-unless you do another like-kind exchange, in which case the gain gets passed on to the next property you buy. Rather than have the $10,000 profit taxed as a capital gain, the like-kind exchange allows the gain to be "passed on" to the new property used for business. Say you paid $20,000 for a piece of business or investment real estate and sold it for $30,000 ($30,000 - $20,000 = $10,000 capital gain). The Internal Revenue Service (IRS) uses Form 8824 for like-kind exchanges.Ī like-kind exchange doesn't eliminate taxes it just pushes them into the future. But if you immediately buy a similar property to replace the one you sold, the tax code calls that a "like-kind exchange," and it lets you delay some or all of the tax effects. Ordinarily, when you sell something for more than what you paid to get it, you have a capital gain when you sell it for less than what you paid, you have a capital loss.
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