IRS Form 8924 – IRS Forms, Instructions, Pubs 2026

IRS Form 8924 – IRS Forms, Instructions, Pubs 2026 – IRS Form 8924 reports and pays the excise tax triggered when an eligible entity transfers (by sale, exchange, or lease) a qualifying geothermal or mineral interest that was previously acquired in a conservation sale. This tax recaptures part of the tax benefit from a special 25% long-term capital gain exclusion allowed under Section 403 of the Tax Relief and Health Care Act of 2006 for conservation sales of interests on specific eligible federal land in Montana’s Rocky Mountain Front area.

The form ensures that conservation purposes under IRC Section 170(h) remain protected. If a subsequent transfer violates those purposes (or occurs without proper safeguards), the excise tax applies. The current revision (December 2025) of Form 8924 and its instructions remain in effect as of 2026.

Who Must File Form 8924?

An eligible entity must file Form 8924 for every transfer of a qualifying mineral or geothermal interest if that interest was acquired in:

  • A conservation sale where the prior owner excluded 25% of the qualifying long-term capital gain, or
  • A prior transfer where the previous owner was relieved of Form 8924 liability.

You do not need to file if:

  • The new transferee is also an eligible entity and provides a qualifying letter of intent at the time of transfer.
  • The transferee (even if not eligible) proves the transfer will remain consistent with conservation purposes and provides the letter.
  • The Form 8924 tax was already paid on a prior transfer of the same interest.

Eligible entity includes:

  • Governmental units or agencies primarily operated for conservation purposes (IRC Section 170(c)(1) or 170(h)(4)(A)(i)–(iii)).
  • Certain tax-exempt organizations described in IRC Section 170(b)(1)(A)(vi) or 170(h)(3)(B) that operate primarily for conservation.

Key Definitions

  • Qualifying mineral or geothermal interest — An interest in any mineral or geothermal deposit on eligible federal land that represents the transferor’s entire interest in that specific deposit (not divided artificially to avoid rules).
  • Eligible federal land — Specific Bureau of Land Management (BLM) and Forest Service land in the Rocky Mountain Front Mineral Withdrawal Area in Montana (detailed maps and descriptions in the instructions).
  • Conservation sale — A voluntary sale (not under condemnation) to an eligible entity where a qualifying letter of intent is provided.
  • Qualifying letter of intent — A written statement committing that the acquisition serves conservation purposes under IRC Section 170(h)(4)(A)(i)–(iii), use will remain consistent with Section 170(h)(5), and this will continue even after future transfers.

When and Where to File?

File Form 8924 by the 90th day after the date of the taxable transfer.
You can request an automatic extension with Form 7004, but it does not extend the time to pay the tax.
Mail to:
Department of the Treasury
Internal Revenue Service
Kansas City, MO 64999

Use approved private delivery services for timely mailing proof if needed.

How to Calculate the Excise Tax on Form 8924/

The excise tax equals 20% of the portion of the qualifying gain that was previously excluded from gross income by the original seller (or allocated to the transferred interest).

The form computes this as follows (based on the December 2025 revision):

  • Line 1 → Date of the transfer.
  • Line 2 → Sales price (if sold/exchanged) or rental income (if leased).
  • Subsequent lines → Determine the amount of previously excluded gain allocable to this transfer.
  • Final step → Multiply that amount (typically Line 5) by 20% (0.20) to arrive at the tax due (Line 6 → Line 10).

If you transfer only part of the interest, the excluded gain is prorated based on the fair market value or other reasonable method.

Line 10 = Tax due. Pay electronically if possible (EFTPS, same-day wire, or check payable to “United States Treasury”).

Line 11 (if overpayment) → Request a refund or direct deposit (new fields added in 2025 revision for routing/account info).

Penalties and Interest

  • Late filing → Up to 25% of the net amount due (5% per month).
  • Late payment → 0.5% per month (up to 25%).
  • Interest accrues on unpaid tax from the due date (under IRC Section 6621).

Recent Updates (2025–2026)

  • December 2025 revision added direct deposit fields and stronger electronic payment encouragement.
  • No major legislative changes to the underlying rules as of early 2026.
  • Always check IRS.gov/Form8924 for the latest instructions or developments.

Download the Official Form and Instructions

Final Thoughts

Form 8924 enforces the conservation intent behind the valuable 25% capital gain exclusion for qualifying mineral/geothermal interests on protected federal lands. Eligible entities acquiring these interests must carefully document ongoing conservation compliance and obtain proper letters of intent on any resale or lease to avoid the 20% excise tax recapture.

Consult a tax professional familiar with conservation easements and mineral rights if you are dealing with these specialized interests. For the most current guidance, always refer directly to the IRS form and instructions linked above.

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