Triva isn't available right now.
Check out the support page for our phone number and hours
Screen 8824 - Like-Kind Exchanges (1040)
Show all hidden content
Overview
Asset module transfer
Data entered in the asset module automatically transfers to the appropriate field(s) on this screen. UltraTax CS displays the transferred data in blue text.
You can overrule the transferred amount by entering the appropriate amount in any transferred field.
note
- UltraTax CS does not overwrite an overruled fields with any subsequent asset module transfers.
- Overruled field values will be used in the calculation of the return.
- To restore the transferred amount, right-click and select Delete overrule.
- To acknowledge an overruled field, right-click and select Acknowledge overruled data.
For more information on Overrules, please refer to the Statements overview and Enabling notifications of overruled data.
Form 8824 - Like-Kind Exchanges - General Information
Use this section to enter general information about the like-kind exchange.
note
- UltraTax CS provides a client-specific option to specify the method of entering asset information: you can either enter it in the asset module or in the various depreciation screens.
- If you choose the asset module as the method of data entry, this screen is not applicable and does not appear.
- To enter asset information in this screen, selectFilethenClient Properties, selectAdvanced Properties, and clear theEnter asset detail informationbox in the Enter Asset Detail tab to turn off the detailed asset information default.
- For more information, refer to Where do I enter asset data?
Unit / Form
These fields contain information about the business unit activity. UltraTax CS uses this information to gather and coordinate information for the business unit activity. For example, these fields enable UltraTax CS to link information (such as income, loss, sales, credits, and asset detail) for the activity. The 8824 screen is located in the following folders:
- Business
- Rent & Royalty
- Farm
- Farm Rental
- K1 1065, 1120S
- K1 1041
- Personal Sale
- 1040 Adjustments
note
- UltraTax CS automatically enters the form and unit number for screens located in the business activity folders and when transferred from the asset module.
- Because there are multiple forms available in the Itemized Deductions folder, the form information must be entered. The available forms that may be entered in theFormfield are listed in the table that follows and in the fieldview.
Form code | Form description |
|---|---|
2106 | Form 2106 |
Misc | Miscellaneous |
M | Miscellaneous |
- You can leave theFormandUnitfields blank in screens located in the Personal Sale folder. The only form code available for these screens is M.
- The 4562, 8829, and Auto screens are only available when detailed asset data entry is turned off. (To turn off detailed asset data entry, selectFilethenClient Properties, selectAdvanced Properties, and clear the Enter asset detail information box in the Enter Asset Detail tab.) Although the Sale and 8824 screens in the Personal Sale folder are visible when detailed asset data entry is turned on, sales entered in the Sale screen and like-kind exchanges entered in the 8824 screen cannot be linked to a business unit activity. Enter sales and like-kind exchanges related to a business unit activity in that particular entity's folder.
Liability given up
Enter only liabilities assumed by the other party in the exchange.
Liability assumed
Enter only liabilities assumed from the other party in the exchange.
Property given up
This description, which transfers automatically from the asset module , is used as the unit description and is reported on the form. This field is mandatory.
State
If you are processing a state return, enter the two-character postal code for the state to which this unit belongs. This code is used by the various state applications to help determine in-state and out-of-state amounts.
note
- A postal code entry is required for proper state processing.
- To transfer data to a state input screen, enter codeMin theFormfield in the Personal Sale folder. You can leave theUnitfield blank in screens located in the Personal Sale folder.
Property received
Enter the description of the property received. This description transfers from the asset module and is reported on the form.
Sale of auto asset
For employee business expense activities using supplemental business expense (SBE) allocation, mark this field if the sale is related to an auto asset. UltraTax CS uses this information to include the sale of the auto asset for at-risk and passive calculations when supplemental business expense allocation is present in the 2106 screen. For all other activities, this field is optional.
Section 121 exclusion
Enter the amount of section 121 exclusion for the property given up. The amount will be reported as "Section 121 exclusion" and will adjust the Form 8824 realized gain reported on line 19. This amount may also adjust amounts reported on lines 20 and 25. Please refer to the Form 8824 instructions for additional information.
Treatment
The entry in this field controls where to report the information on Form 4797 or Schedule D. The table that follows provides a definition for each force code and describes where UltraTax CS places the information. You can enter these codes directly or select them from the fieldview. Note that the asset module automatically enters code
1
or 2
based on the nature of the asset. You may override the automatically entered code, if desired.Force Code | Reporting location of asset |
|---|---|
1 | Form 4797, Part I, long-term |
2 | Form 4797, Part II |
S | Schedule D, Short-term |
L | Schedule D, Long-term |
M | Schedule D, 28% rate |
State use
- For California returns, code4is not applicable for this screen.
- For Idaho returns, enter5in this field if the unit qualifies for capital gains deduction. This amount will automatically transfer to 1040-ID Form CG - Idaho Capital Gains Deduction.
- For Iowa returns, code3is not applicable for this screen.
- For Massachusetts, Pennsylvania, and Wisconsin returns, enter1in this field for a unit that does not qualify for installment treatment.
- For New Hampshire returns, codes1and2are not applicable for this screen.
- For Oklahoma returns, code8is not applicable for this screen.
- For Vermont returns, code6is not applicable for this screen.
Part I - Information on the Exchange
The dates in this section transfer to Part I of Form 8824.
Date...
Enter the date in MM/DD/YY format. Or, enter
VARIOUS
to print "VARIOUS" for the date on the return. The date will be reported on Form 8824, Part I. UltraTax CS produces a diagnostic if the period between the transfer and identification dates exceeds 45 days or if the period between the transfer and received dates exceeds 180 days.note
If UltraTax CS is unable to calculate a holding period (because, for example, a date field is blank or
VARIOUS
is entered in the Date like-kind property given up was acquired
or Date property transferred to other party
fields), UltraTax CS defaults to a short-term treatment. The asset treatment can be changed by selecting a treatment in the Treatment
field in this screen.Part III - Computation of Gain and Basis
Use this section to enter gain and basis calculation information.
Computation of gain and basis
The information entered in these fields will be reported Form 8824, Part III and will be used to calculate the realized gain or loss, recognized gain, and basis of like-kind property received.
UltraTax CS does not automatically report the gain or loss recognized on non-like-kind property used in the exchange to the tax return. To report the gain or loss on the non-like-kind property used in the exchange, enter the exchange information for those items separately in the appropriate screen based on the correct reporting of the exchange. The gain or loss recognized on non-like-kind exchange property is reported on Form 8824, line 14.
note
UltraTax CS produces an FYI diagnostic when there is a reportable gain from the exchange involving other property given up reported on Form 8824, line 14. Use the applicable screen to properly report the other property gain on the return. For example, if the other property is a business asset, use the Sale screen to report the gain on the 4797 or Schedule for detail on the B&D screen to report on Form 8949.
Fair market value of non-section 1245 property received
Enter the fair market value of section 1245 property if the section 1245 property received was given up in addition to the like-kind property. Section 1245 property is described in Internal Revenue Code Section 1245.
Adjusted basis of like-kind property given up, etc.
Enter the adjusted basis of like-kind property given up in the exchange. If exchange was made at a separate entity level and is being passed through to the taxpayer on a K-1, this field will be disabled (shaded). Information on the adjusted basis of like-kind property given up in a pass-through entity should be reported in the
Adjusted basis of like-kind property from pass through entity
field.Adjusted basis of like-kind property from pass through...
For exchanges at a separate entity level that are passed through to the taxpayer on the K-1, enter the cost or other basis of the property given up, the depreciation allowed or allowable excluding section 179, the section 179 expense deduction passed through, and the section 179 carryover passthrough in the applicable fields. If the exchange is not in the K-1 1065, 1120S folder, these fields will be disabled (shaded).
Total potential ordinary income under recapture rules
Enter the total potential ordinary income under the recapture rules in this field. If exchange was made at a separate entity level and is being passed through to the taxpayer on a K-1, this field will be disabled (shaded). Information on the total potential ordinary income under recapture rules is calculated based on entries in the
Depreciation allowed or allowable excluding section 179
, Section 179 expense deduction passed through
, and Section 179 carryover
.Total potential unrecaptured section 1250 gain
Enter the total potential unrecaptured section 1250 gain in this field. If exchange was made at a separate entity level and is being passed through to the taxpayer on a K-1, this field will be disabled (shaded).
Related Party Exchanges
Use this section to enter related-party exchanges. UltraTax CS uses this information to answer the related-party questions on Form 8824. This data proformas for two years after the year of sale, unless either party has resold the like-kind property.
note
UltraTax CS transfers gains to the appropriate form based on the data entered.
Explanation if no tax avoidance purpose
If the no tax avoidance exception applies to the disposition, enter your explanation as required by Form 8824 in the attached statement. If you enter data in this statement, UltraTax CS marks the appropriate box on the form and prints the statement.
note
If you enter information in the attached statement and enter code
1
or 2
in the previous field, UltraTax CS marks two exception codes on Form 8824.Exchange is prior year like-kind exchange
Enter
X
in this field if the exchange occurred in a prior year. Form 8824 is required to be filed two years after the year of exchange when the exchange is between related parties. Marking this field will ensure that Form 8824 is reported correctly in subsequent years.