The Franchise Tax Board's 2025 instructions for Form FTB 3840 say California requires taxpayers who exchange real property located in California for like-kind property outside California, under IRC Section 1031, to file that form. The instructions say it is filed for the year of the exchange and for later years, generally until the California-sourced deferred gain or loss is recognized, and that the requirement can apply even when the taxpayer has no other California return. Those are the FTB's instructions. They are not a tax opinion from Capital Market Funds. We do not prepare the form and we are not a qualified intermediary.
The work on this page is the acquisition loan for the Arizona replacement property. Identification and closing dates belong to the exchanger, the intermediary, and the tax advisor. If a life-company or agency lender cannot finish inside that window, bridge with a named takeout is the same conversation we have on any tight Arizona purchase. We will not size a loan to a tax result, and we will not tell you whether the California property qualifies for deferral.
Debt inside the exchange window
Send the Arizona contract, the rent roll, and the date the intermediary says the purchase has to close. Permanent credit that misses the date is not fixed by calling the loan a 1031 product. The statewide exchange page, which is not California-specific, is Arizona 1031. Purchase mechanics without the exchange label are acquisition.
A long hold on the Arizona building is a credit question: the lender's term, the prepay, and the sponsor's plan. It is not our advice about how long Form 3840 must be filed. The FTB's instructions are the source for that filing.
California proceeds, Arizona collateral
We do not custody exchange funds and we do not direct the qualified intermediary. The lender, if the loan closes, is the agency executing party, a life company, a bank, a CMBS issuer, or a bridge source. We are not a Fannie Mae DUS lender and we are not a bank. There is no California office. The desk is 7373 E Doubletree Ranch Rd #255, Scottsdale, AZ 85258.
Sponsors who are not in an exchange, and who simply live in California, start at California investors. Call (480) 495-8072.
Arizona replacement-property debt
| Source | When it fits |
|---|---|
| Arizona 1031 | Statewide replacement-property debt. Not a tax memo. |
| Acquisition | The purchase, separate from the exchange label. |
| Bridge | When permanent credit will not finish inside the exchanger's dates. |
| California investors | Arizona loans for California sponsors who are not exchanging. |