In like-kind exchange, should I use ONLY "Depreciation" and "form 8824 " in Deductions, or do I ALSO need to use the "Schedule D", "4797 form" and "form 8824" in Income?

[ckeller]

Please, is there anyone who could help me on this tax return for a client. First time using PTO and I'm having a hard time for the past week. When client has a 1031 exchange property from CA selling it in 2018 which had a depreciation of the land, and a replacement property in the same year in NY.
Should I use ONLY "Depreciation" and "Like-Kind exchange 8824 form" in Deductions, or do I ALSO need to use the "Schedule D", "4797 form" and "Like-Kind exchange 8824 form" in Income?

Also, do I need to file the form CA 3840 final as well? TIA

[George4Tacks · Accepted solution]

If you have depreciation, this is likely the article to get you started. https://accountants-community.intuit.com/articles/1628244-how-do-i-enter-a-like-kind-exchange-in-the... 

Yes, you do need to file the 3840 for 2018 and every year thereafter until the exchange property is sold. 

[ckeller]

In this case the exchange property was sold the same year, do I need to file the CA 3840 as Final? Thank you!

[George4Tacks]

Yes. Reporting the taxable gain as CA income.

[abctax55]

"...which had a depreciation of the land".

Land is not depreciated.  Are there also improvements involved?

[TaxGuyBill]

That was my original thought too, but I *THINK* the situation is that the prior property had depreciation, then a 1031 exchange was done for land.  So selling the land would still result in §1250 gain from the depreciation of the prior property.

[ckeller]

Sorry guys, that was mistake from my part, I meant depreciation of the building, not land. On the 2017 depreciation, there was a cost basis showing in the box titled as Land, that's what confused me.