1031 Tax Exchange Forms

There are several forms that are required to be filled while carrying out transactions under Section 1031. Some of the important forms include IRS Form 8824 for like-kind exchanges and IRS Form 4797 for the sale of business property.

There are several agreements that need to be taken care of in terms of paperwork and documentation such as the purchase agreement and sale agreement, earnest money agreement, and offer and acceptance agreements. There are several formats of tax exchanges such as the two-party swap, Alderson exchange, safe harbor, multiple sales/acquisitions, reverse exchange, and improvement exchange. The documentation differs according to these formats.

There are several legal firms as well as real estate firms that help the individuals as well as companies to fill the forms required for availing themselves of the benefits of Section 1031. If one is not aware of the various rules and regulations under this section, then it is better to consult an expert in the matter, as the IRS is quite strict about the documentation part under tax exchange laws.

There are several online consultants that are available to help you in filling out these forms. Ever since Section 1031 came into existence around five decades ago, the U.S. Department of the Treasury has been trying to simplify the procedures and reduce the documentation as much as possible. The efforts specially gained momentum in 1990s. However, certain forms are still mandatory. This requirement also helps ensure that you are not taken advantage of. Most of the real estate consultants and attorneys provide these forms to their clients and help them in filling out these forms as well. Any incorrect information given in these forms could jeopardize not only the transaction itself, but could also have serious legal consequences.

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