When Should You File California FTB Form 3840?
California FTB Form 3840 must be filed in the year the like-kind exchange takes place, and for each subsequent year during which the gain or loss remains deferred. It is important to note that you are not required to file Form 3840 to report properties acquired in a Section 1031 exchange if they are located in California.
For detailed instructions, you can refer to the FTB Form 3840 instructions
Form 3840 is necessary for the taxable year in which the exchange occurs, and it should be filed for each following taxable year until the deferred gain or loss is recognized on a California tax return. For further details, consult R&TC Sections 18032 and 24953.
Failure to file California FTB Form 3840 as mandated may result in the FTB estimating your net income and levying taxes along with any applicable penalties and interest. For more information on this matter, visit FTB Miscellaneous Information
1031 Exchanges Made Easy
At CPEC1031, LLC we do everything we can to make your 1031 exchange as easy as possible. Our intermediaries are standing by and ready to help you through all the unique details of your like-kind exchange. With over two decades of experience facilitating exchanges via section 1031 of the Internal Revenue Code, we have the skills and experience needed to make your exchange a reality. Contact us today at our Minneapolis offices to learn more about our services and see how we can help with your next tax-deferred exchange of real estate.
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
Defer the tax. Maximize your gain.
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