Form 8824 Preparation Support

Form 8824 asks for specific figures: dates transferred and received, fair market values, adjusted basis, liabilities relieved and assumed, and any recognized gain. None of that is opinion; it is arithmetic pulled from settlement statements, loan documents, and the identification notice. Support work organizes those numbers into a reconciled package before the CPA sits down to prepare the return, rather than leaving the preparer to request each figure individually, one email at a time, during the busiest weeks of tax season.

The Numbers That Actually Populate the Form

For a relinquished property sold at $3.5M with $1.2M in adjusted basis and a $1.4M loan payoff, and a replacement property purchased at $3.8M with a $1.3M new loan, the reconciliation needs the exact date of each transfer, the exact liabilities relieved and assumed, and any cash boot identified separately. A single-property exchange is straightforward arithmetic; a multi-property exchange, say one relinquished property replaced by an industrial building and a DST allocation, requires allocating basis and value across each replacement asset individually rather than as one lump sum, using each property's fair market value at acquisition as the basis for the split.

Where the Reconciliation Usually Breaks

Dates are the most common mismatch: a settlement statement dated the day funds were disbursed can differ from the date title actually transferred, and Form 8824 asks for the transfer date specifically. Liability figures are the second common gap, since a settlement statement often nets debt payoff against other credits in a way that obscures the gross liability relieved. Pulling the actual payoff statement, rather than relying on the settlement statement's net figure, avoids a reconciliation that looks close enough but isn't exact.

A Worked Multi-Property Allocation

A $3.5M START EXCHANGE REVIEW replaced by a $2.4M Columbia Corridor industrial building and a $1.4M DST allocation needs its $1.2M adjusted basis split between the two replacements in proportion to their relative fair market value, roughly 63 percent to the direct purchase and 37 percent to the DST. Get that split wrong and both the direct property's future depreciation schedule and the DST's eventual disposition reporting inherit the error, often not discovered until years later when one of the two assets is sold or exchanged again. Running the allocation once, correctly, at the time of the original exchange saves a much harder reconstruction down the line, particularly if either asset is later refinanced, improved, or exchanged again and the original allocation is needed as a starting point.

Building the Reconciliation Package

• Confirm exact transfer and receipt dates from title, not from the settlement statement date alone.
• Pull gross debt payoff and gross new loan amounts from payoff letters and loan documents.
• Allocate basis and value separately for each replacement property in a multi-asset exchange.
• Cross-check any identified cash or non-like-kind boot against the settlement statements.
• Summarize related-party involvement, if any, since it triggers separate reporting requirements.

Cross-River and Multi-State Reporting Notes

The federal Form 8824 mechanics are identical whether the replacement property sits in Multnomah County or Clark County, Washington; the exchange itself is a federal matter. State-level reporting, and how gain is ultimately treated on disposition in Oregon versus Washington, is a separate question the CPA handles outside the federal form, and it is worth flagging early rather than assuming the two states are treated the same way at the state level. Investors comparing a Clark County acquisition against a Multnomah or Washington County alternative sometimes weigh Washington's lack of a state income tax into the decision, but that consideration affects long-term hold and eventual disposition planning, not the federal Form 8824 figures themselves.

Common 1031 Exchange Questions

What information does Form 8824 actually require?

Property descriptions, dates of transfer and receipt, fair market values, adjusted basis, liabilities relieved and assumed, and any recognized taxable gain or boot amount. Preparation support organizes these figures from settlement statements and loan documents; your CPA determines the final reported amounts.

Do I need a separate Form 8824 for each replacement property?

Generally the exchange is reported on one form covering the relinquished property and all its replacements, but a multi-property exchange requires allocating value and basis across each replacement individually within that form, using fair market value at acquisition as the allocation basis.

What's the most common error in exchange reporting?

Mismatched dates between the settlement statement and actual title transfer, and using net rather than gross debt figures when calculating liabilities relieved and assumed. Both are catchable with a document-level reconciliation before filing, run against the original title records rather than a later summary.

Does a related-party exchange need different documentation?

Yes, exchanges involving related parties carry additional reporting requirements and a two-year holding restriction; flag any related-party involvement early so your CPA can address it specifically, since discovering it after the return is filed is much harder to correct.

Can this support replace my CPA's tax preparation work?

No. This organizes the factual record into a form your preparer can use efficiently; determining tax positions, recognized gain, and final reported figures remains your CPA's responsibility. That includes how basis is allocated across two or more replacement properties, generally in proportion to each one's fair market value relative to the total, though the exact method should be confirmed with your CPA rather than assumed from a general formula.

Ready to organize the exchange file?