After completing your 1031 Exchange, what documents should you provide to your tax preparer to complete your tax return?
Your Certified Public Accountant (CPA) or tax accounting preparer will need specific information to verify and substantiate the details provided to the Internal Revenue Service (IRS) on IRS Form 8824.
Here’s a checklist of essential documents you can easily provide to expedite the completion of your tax return:
Close-out letter from your qualified intermediary summarizing the 1031 exchange, detailing how your funds were utilized and the closing dates.
PDF copy of the final signed Relinquished Property Closing Statement from the sale of your old investment or business real estate.
PDF copy of the deed or other transfer document conveying ownership of the Relinquished Property to the purchaser.
If you received a 1099-S from the closing agent, title closing, escrow officer, law firm, or individual responsible for the transaction, provide it to your CPA or tax accounting preparer. This document serves as proof of the gross proceeds from the sale or the cash you were entitled to receive as the transferor, potentially confirming the closing date.
If you’re incurring unusual or non-standard transactional expenses or making financial concessions to the purchaser as per the terms of the sale contract (with any applicable amendments) with the buyer, you should also provide a PDF copy of the sale contract (purchase agreement). This document demonstrates your obligation to pay these transactional expenses or financial concessions, such as a repair allowance or partial rebate of the purchase price.
If you sent a 1031 replacement property identification form to your qualified intermediary or another party involved in the transaction during the 45-day identification period, you must provide a PDF copy of the final signed and sent document. This document should include information and confirmation that it was properly and timely sent. Additionally, it may be beneficial to include an acknowledgment of receipt.
The PDF copy should include the following:
A PDF copy of the final signed replacement property closing statement from the sale of your old investment or business real estate.
A PDF copy of the replacement property deed or other transfer document through which you received the ownership of the replacement property from the seller.
Any corrected or changed documents that may have occurred after the closings, such as refunds for improperly calculated payoffs of real property taxes or mortgages, deeds of trust, or closing charges.
A PDF copy of all of your fully signed 1031 documents, including your exchange agreement, assignment agreements, notices, and written verification of the use or return of unused 1031 exchange funds (if applicable).
Qualified Intermediaries Near You
Find a qualified intermediary near you to get your 1031 exchange questions answered. CPEC1031, LLC has been facilitating like-kind exchanges under section 1031 for more than two decades. Our skilled 1031 exchange professionals are here to guide you through the complex 1031 exchange process and make sure you have all your bases covered throughout the scope of your exchange. Contact us today at our downtown Minneapolis office to learn more about the services we offer and how we can help with your next 1031 exchange of investment 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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