Critical Diagnostic Error - CA Form 3840

Forum|Forum|6 years ago
April 24, 2020
1 reply
1 view

Hello Lacerte Community:

I am here once again for your help. I am trying to submit a partnership return in Lacerte but have a critical diagnostic error that goes like this "e-file: Form 3840, Schedule A, Part 1: If Line 1 Property is checked as property in California - Line 8, Part II, and Part III are required for electronic filing purposes. (ref #2053385)" and is preventing me from e-filing.

I have all the necessary fields populated with data -- Line 8 and Part II and Part III for the like-kind exchange.

Don't know what's the solution to fix this error message. Any help wold be appreciated.

Many thanks in advance.

Lacerte Tax

This topic has been closed for replies.

D

dfa

Level 4

I'm having the same problem with Lacerte 2019. I do several 1031 exchanges a year with Form 3840 and filled this one out no differently than prior years. Try to override the diagnostic when e-filing. I'm also getting a diagnostic regarding TCJA and my assets might not be eligible for 1031 which is another glitch that I'm hoping to override.

S

SBTSAuthor

Level 4

Hello:

I was able to resolve this diagnostic by entering the values in 4 fields located under the 'California Like-Kind Exchanges (3840)' section:

1. Total CA source deferred gain
2. Apportionment percentage (xx.xxxx)
3. Properties given up (Crtl+E)
4. Properties received (Crtl+E)

As I understand, #2 above is now a mandatory field which may not have been the case in prior years. Since with my client's return, I did have out of state income, I did have a value to enter in #2.

For 100%, enter 100.00 if you do not have out of state apportionment.

Check the outcome on Part III, lline 11 of 3840.

Good luck and please let us know if this worked.

D

dfa

Level 4

Thanks! It worked. It was the apportionment. My guy is a CA resident selling CA property for AR property. Lacerte doesn't appear to have a CA Schedule R for individuals and so I'm hoping the AR rental property doesn't require a Sch R since it's a passive activity of its own and I'll use 100% for apportionment.

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