Inputs to organize
- Amount realized
- Adjusted basis
- Exchange expenses
- Money and non-like-kind property received
- Liability inputs
What the worksheet shows
- Estimated realized gain
- Estimated recognized gain
- Estimated deferred gain
- Replacement basis checkpoint
How the model works
Estimate realized gain from amount realized less adjusted basis and entered exchange expenses as classified for the model.
Import potential boot from the cash, non-like-kind property, and liability worksheet.
Estimate recognized gain subject to the realized-gain ceiling and any professional adjustments.
Estimate deferred gain as realized gain less recognized gain.
Display a replacement-basis checkpoint without presenting it as a filed-tax-return number.
Checks before relying on the output
- Require a completed adjusted-basis input.
- Prevent recognized gain from exceeding realized gain.
- Warn when exchange expenses or liability entries are unclassified.
- Separate amount of gain from tax rate and tax character.
The implementation must be validated against Form 8824 examples and cannot estimate final tax without rate and character analysis.
Common questions
What is realized gain?
It is the economic gain calculated from amount realized, adjusted basis, and applicable exchange expenses before determining how much must be recognized currently.
What is deferred gain?
For the worksheet, it is realized gain not included in the estimated recognized amount. It is generally reflected in replacement-property basis rather than erased.
Does recognized gain equal the tax bill?
No. Tax depends on character, depreciation, holding period, federal and state rates, other income, and the filed return.
Why show a replacement-basis checkpoint?
Deferred gain affects basis in the replacement property. The checkpoint helps identify an input mismatch before the calculation is used for planning.
Can the result be used on Form 8824?
It can organize inputs, but the filed form and supporting schedules should be prepared or reviewed by the responsible tax professional.
