Form 3840 reporting - Spidell

Form 3840 reporting

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Message Board Form 3840 reporting

This topic contains 5 replies, has 4 voices, and was last updated by Lynn Freer 3 months, 1 week ago.

  • Author
    Posts
  • #174993
    George Ashley
    Participant

    is Sec 1033 transaction reportable on Form 3840?

  • #174994
    Larry Pon
    Participant

    Form 3840 only applies to 1031 exchanges when exchanging a California property for a non-California property.   Accordingly no 3840 required for a 1033 transaction.

    • #175023
      George Ashley
      Participant

      So for an involuntary conversion is there a clawback by California on the built-in California gain when the out of state replacement property is eventually sold?

  • #175034
    Lynn Freer
    Participant

    There is a clawback but you don’t have to alert the FTB with Form 3840

  • #175643
    Mark Bole
    Participant

    Curious what you people think the definition of “clawback” is.  Even before Form 3840, California source income was always taxable wasn’t it?

  • #175707
    Lynn Freer
    Participant

    You are correct Mark, the subsequent sale of property with deferred gain has always been subject to CA tax, but nobody ever paid it and the FTB didn’t have a way to find out about it. Clawback is technically the right word but what was meant that CA would get the tax on the deferred CA gain