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Filing form 3840

December 01, 2016 • Peter Morfin • Log In to Post Comments

Need clarification on filing scheducle 3840. A California resident (an individual taxpayer) executed a like kind exchange. Both properties were in Hawaii.  Does he need to file form 3840?  In the Spidell 2015/2016 Federal and CA Tax Update Seminar materials there is a chart on pg. 7-4 that clearly indicates that it is NOT required.  When I asked the semianr leader he confirmed this.  However, at the Spidell 2016/2017 Federal and  CA Tax Update Seminar I attended in San Rafael yesterday, the seminar leader said that it was required in that circumstance. Since this is obviously a crucial tax matter, i would appreciate clarification ASAP.



Peter, the Form 3840 is only required if you exchange a California property for an out-of-state property, see R&TC Sec. 18032 and the Form 3840 instructions. We'll follow up with the seminar speakers to make sure there is no confusion on this issue. 


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