IRS Instruction 8924 – IRS Form, Instructions, Pubs 2026

IRS Instruction 8924 – Form 8924 is a specialized IRS excise tax return that eligible entities (such as certain government units or conservation organizations) must file when they transfer ownership or possession of qualifying mineral or geothermal interests originally acquired through a conservation sale. These interests are located on specific eligible federal lands, primarily in Montana’s Rocky Mountain Front area.

This article provides a clear, up-to-date breakdown of IRS Instruction 8924 (Rev. December 2025) based on official IRS sources. It covers who must file, key definitions, filing deadlines, how to complete the form, penalties, and practical tips.

What Is Form 8924 and Why Does It Matter?

Congress created this form to support conservation efforts on sensitive federal lands while preventing abuse of tax benefits. Under specific tax rules (originating from the Tax Relief and Health Care Act of 2006), sellers in a qualifying “conservation sale” can exclude 25% of the long-term capital gain from gross income when selling mineral or geothermal interests to an eligible entity that promises to protect conservation purposes.

If the eligible entity later transfers the interest (by sale, exchange, or lease) in a way that does not maintain those conservation purposes, it must pay an excise tax and report it on Form 8924. The form recaptures the tax benefit previously granted to the original seller.

Key takeaway: This mechanism encourages long-term conservation stewardship on eligible federal lands, including Bureau of Land Management (BLM) and Forest Service areas in the Rocky Mountain Front.

Purpose of Form 8924 (Per IRS Instructions)

Use Form 8924 to:

  • Report certain transfers of qualifying mineral or geothermal interests.
  • Calculate and pay the associated excise tax.
  • Claim relief from liability in qualifying cases (e.g., when transferring to another eligible entity with proper documentation).

Download the latest form and instructions directly from the IRS:

Who Must File Form 8924?

An eligible entity must file Form 8924 for each subsequent transfer of a qualifying interest if that interest was acquired in:

  • A conservation sale where the previous transferor excluded 25% of the qualifying gain, or
  • A prior transfer where the previous transferor was relieved of Form 8924 liability.

Relief from filing is available if one of these conditions is met at the time of transfer:

  • The new transferee is also an eligible entity and provides a qualifying letter of intent.
  • The transferee (even if not eligible) proves the transfer will remain consistent with conservation purposes under IRC Section 170(h)(5) and provides the letter.
  • The excise tax was already paid on a previous transfer of the same interest.

Eligible entity includes:

  • Governmental units or their agencies focused on conservation (per IRC Section 170(c)(1) and 170(h)(4)(A)).
  • Certain tax-exempt organizations under IRC Sections 170(b)(1)(A)(vi) or 170(h)(3)(B) operated primarily for conservation purposes.

Key Definitions in IRS Instruction 8924

Understanding these terms is essential for compliance:

  • 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 circumvent rules). Retaining interests in other contiguous deposits does not disqualify it.
  • Eligible federal land — Specific BLM and Forest Service lands in the Rocky Mountain Front area of Montana, as depicted on the official map (available via the Forest Service).
  • Conservation sale — A sale to an eligible entity after December 19, 2006, accompanied by a qualifying letter of intent, and not under condemnation or eminent domain.
  • Qualifying letter of intent — A written statement confirming the transferee’s intent to use the deposits consistently with conservation purposes under IRC Section 170(h)(4)(A) and 170(h)(5), even in future transfers.
  • Bureau of Land Management land and Forest Service land — Defined with precise geographic boundaries in the instructions (e.g., specific townships and ranges in Lewis and Clark National Forest and Flathead National Forest areas).

When and Where to File?

  • Deadline: File by the 90th day after the taxable transfer.
  • Extension: Request more time with Form 7004 (automatic extension for filing, but not for payment).
  • Amended return: Write “Amended” at the top and file a corrected form.
  • Mailing address: Department of the Treasury, Internal Revenue Service, Kansas City, MO 64999.
  • Private Delivery Services: Use IRS-designated PDS for timely mailing proof (check IRS.gov/PDS).

Tip: Pay any tax due on time—extensions do not extend the payment deadline. Use electronic options when possible.

How to Complete Form 8924 (Step-by-Step Overview)?

General preparation:

  • Use the name and address from your most recent federal tax return.
  • Round amounts to whole dollars.
  • Foreign addresses: Follow the country’s postal conventions and spell the country name in English uppercase letters.

Tax Computation Section (on the form itself): The form includes a dedicated Tax Computation area (typically starting with Line 1: Date of sale or other disposition). Later lines calculate the taxable amount (often tied to the previously excluded 25% gain), any credits or prior payments, and the final tax due. Line 10 generally shows the tax due (excess of computed tax over payments/credits). Line 11 handles overpayments and refunds.

Payment and Refund:

  • Line 10 (Tax Due): Pay electronically via EFTPS, same-day wire, or check (payable to “United States Treasury,” with EIN and “Form 8924” noted).
  • Line 11 (Overpayment): Request a refund or apply to next period. Provide direct deposit details (routing number, account type, account number) for faster processing.

Signature and Paid Preparer: Sign the form. Paid preparers must include their PTIN and firm details.

The 2025 revision added/enhanced direct deposit fields and emphasized electronic payments.

Penalties and Interest

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

File and pay promptly to avoid compounding costs.

Recent Updates in the December 2025 Revision

  • Enhanced support for electronic payments and direct deposit.
  • Clarified instructions for refunds and payments.
  • Updated Paperwork Reduction Act estimates (average completion time: about 5–6 hours total).

Always check IRS.gov/Form8924 for future developments.

Practical Tips for Compliance

  1. Document everything — Keep the qualifying letter of intent and records proving conservation consistency.
  2. Consult professionals — Work with tax advisors or attorneys familiar with conservation easements and mineral rights.
  3. Track transfers — Liability can chain through multiple transfers until the tax is paid or relief is properly obtained.
  4. Download current versions — Use the December 2025 revision (or later) from IRS.gov.
  5. Electronic filing/payments — Preferred for speed and proof.

Note: This article summarizes official IRS guidance for informational purposes only and is not tax or legal advice. Rules can be complex, especially with specific land boundaries and conservation requirements. Consult a qualified tax professional or the IRS directly for your situation.

Resources

For questions about qualifying lands, conservation sales, or specific computations, refer to the full instructions or contact the IRS.

Last updated based on IRS materials as of early 2026. Tax laws and forms are subject to change—always verify the latest on IRS.gov.