2024 Tax Day: Key Dates and Factors Involving 1031 Exchanges

It’s tax time – individuals and businesses are collecting their various 2023 tax documents, receipts, etc. to get their 2023 tax returns filed by their corresponding due dates. For any Exchangers having started or completed a Internal Revenue Code Section 1031 states that "no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held for productive use in a trade or business or for investment." 1031 Exchange in 2023 there are some specific reporting requirements for their 2023 tax return.

2024 Tax Filing: Reporting a 1031 Exchange

A successful Internal Revenue Code Section 1031 states that "no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held for productive use in a trade or business or for investment." 1031 Exchange allows for the deferral of capital gains, depreciation recapture, state, and net investment income taxes, yet there are still tax filing obligations for the Exchanger to ensure the Internal Revenue Code Section 1031 states that "no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held for productive use in a trade or business or for investment." 1031 Exchange is properly recognized and documented for the IRS.

If a Internal Revenue Code Section 1031 states that "no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held for productive use in a trade or business or for investment." 1031 Exchange was completed in 2023, the Exchanger must submit a Form 8824 along with their 2023 tax return.

If a Internal Revenue Code Section 1031 states that "no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held for productive use in a trade or business or for investment." 1031 Exchange was started in 2023, but not completed by the end of 2023, the Exchanger must file a Form 6252 to provide the IRS with information related to their receipt of the 1099 showing the sale of Relinquished Property in 2023. In other words, without further tax filing, the Service would be expecting that tax reporting related to the 1099 to be reflected on the 2023 tax return.

If a Internal Revenue Code Section 1031 states that "no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held for productive use in a trade or business or for investment." 1031 Exchange was started in 2022, but failed, or was completed with “boot” in 2023 the default reporting is to report the exchange transaction in the second year (2023). However, if an Exchanger had losses in the first year (2022), they may have elected to treat the exchange as though it took place in first year to offset the taxable event with the losses.

1031 Exchange Specific 2023 Tax Return Due Dates

Below are the specific dates that a Internal Revenue Code Section 1031 states that "no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held for productive use in a trade or business or for investment." 1031 Exchange should be reported based on the type of entity that completed the Internal Revenue Code Section 1031 states that "no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held for productive use in a trade or business or for investment." 1031 Exchange .

Reminder: For Internal Revenue Code Section 1031 states that "no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held for productive use in a trade or business or for investment." 1031 Exchange started in the fourth quarter of 2023, specifically after October 18, 2023, if you will need the full 180-day exchange period for your 1031 exchange, your 1031 exchange period will end on your tax due date, April 15, 2024, unless you file an extension on your 2023 taxes. (Taxpayers who live in Maine or Massachusetts have until April 17, 2024 to file their Federal returns. Some states - including Delaware, Iowa, Louisiana, and Virginia – have different deadlines for filing state tax returns.)

March
March 15, 2024: Partnerships and S corporations, must file a 2023 calendar year return (Form 1065) and provide each partner with a copy of their Schedule K-1 (Form 1065) and if applicable Scheduled K-3. If needed, file Form 7004 for an automatic 6-month extension to file the return.

If a partnership or S corporation engaged in a Internal Revenue Code Section 1031 states that "no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held for productive use in a trade or business or for investment." 1031 Exchange , this is the due date by which they must file one of the above-mentioned items pertaining to the exchange.

April
April 15, 2024: Most Individuals, living and working in the US, must file their 2023 tax return, Form 1040 or 1040-SR and pay any tax due. If you want an automatic 6-month extension, file a Form 4868, and pay what you estimate you will owe to avoid any penalties and interest.

April 15, 2024: Corporations, must file a 2023 calendar year income tax return (Form 1120) and pay any tax due. To file an automatic 6-month extension file Form 7004 and deposit what you estimate you owe in taxes to avoid any penalties and interest.

If an Individual or Corporation engaged in a Internal Revenue Code Section 1031 states that "no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held for productive use in a trade or business or for investment." 1031 Exchange this is the date by which they must report the exchange to the IRS.

April 17, 2024: Individuals living in Maine or Massachusetts, must file their 2023 tax return, per the above.

Due Dates for Extensions

September
September 15, 2024: Partnerships and S corporations, if you requested a timely 6-month extension back on March 15, 2024, you must now file your 2023 calendar year return, Form 1065, and pay any difference in tax owed from the payment you made back in March.

October
October 15, 2024: Due date for Individual and Corporations that filed an extension back in April, they must now file their 2023 Tax Return.

For a comprehensive list of dates associated with filing taxes in 2024, visit the IRS website.

Other Tax Filing Considerations

In addition to the above, any Exchangers that invested into a A Delaware Statutory Trust is a real estate investment vehicle that provides investors with access to investment grade real estate that is generally larger than they could have acquired on their own. The Taxpayer acquires a fractional interest (see below) in the property. Use of DSTs in 1031 exchanges was approved by the IRS in Revenue Procedure 2004-86. Delaware Statutory Trust (DST) or Tenants-In-Common (TIC), must also file a state tax return in the state in which the property(ies) are located.

As always, we recommend Exchangers work closely with their tax preparer, CPA, tax advisor, etc. in the preparation of their tax return to ensure they have accurately recorded and reported their Internal Revenue Code Section 1031 states that "no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held for productive use in a trade or business or for investment." 1031 Exchange to ensure compliance with the IRS.

The material in this blog is presented for informational purposes only. The information presented is not investment, legal, tax or compliance advice. Accruit performs the duties of a Qualified  A person acting to facilitate an exchange under section 1031 and the regulations. This person may not be the taxpayer or a disqualified person. Section 1.1031(k)-1(g)(4)(iii) requires that, for an intermediary to be a qualified intermediary, the intermediary must enter into a written "exchange" agreement with the taxpayer and, as required by the exchange agreement, acquire the relinquished property from the taxpayer, transfer the relinquished property, acquire the replacement property, and transfer the replacement property to the taxpayer. Intermediary , and as such does not offer or sell investments or provide investment, legal, or tax advice.