How to Report a 1033 (IRS)

Your 1033 exchange must be reported to the IRS. Many taxpayers do this by completing Form 8824 and filing it along with your federal income tax return. If you completed more than one exchange, a different form must be completed for each exchange. To complete the form, download the instructions here.

It is very important that you file Form 8824 along with your return, since the condemning entity will most probably file a 1099-S upon the settlement of your eminent domain proceeds. Taxpayers are often confused as to why a condemning entity would file a 1099-S with the IRS. As a government agency, they are required to submit a 1099-S upon the completion of every sale (condemnation award or eminent domain settlement).

Form 8824 is the taxpayer’s notification to the IRS that an exchange was completed on those condemnation proceeds in order to defer tax liability.