Tax Reform Update: Generally, only real property qualifies for like-kind exchange treatment under current tax law. See the IRS instructions for exceptions.

Certain exchanges of property are not taxable. This means any gain from the exchange is not recognized, and any loss cannot be deducted.

For information on like-kind exchanges, see IRS Publication 544. Additional information is available on the IRS webpage Like-Kind Exchanges Under IRC Code Section 1031 .

To report that an asset was disposed of in a like-kind exchange:

1. From within your TaxAct return, click Tools > Topic Assistant.
   • On smaller devices, click the menu at the top left corner of your screen, then make your selection.
   • In dashboard navigation, select Resources, scroll to the Assistants section, and select Topics Assistant.
2. Click Add Like-Kind Exchange.
3. During the interview, indicate whether the exchanged property was a Business Asset or a Capital Asset.
4. Complete any additional entries that apply based on your selections.

IMPORTANT: If a like-kind exchange is entered as a regular asset disposition and is not properly reported on Form 8824, the transaction may be treated as a taxable sale rather than a like-kind exchange. Be sure to complete the Like-Kind Exchange interview and review Form 8824 to confirm the exchange is reported correctly.