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, please see IRS Publication 544 Sales and Other Dispositions of Assets. Additional information is available on the IRS website Like-Kind Exchanges Under IRC Code Section 1031.
If the asset was disposed of in a like-kind exchange, you would check the box on the Sale of Business Property form titled Check here if reporting on Form 4684, 8824, or Schedule D Home Sale worksheet (and complete the other required information on the form). In the Q&A you would click Modify on the screen titled Asset Sale - Gain or Loss. You also need to complete the information for Form 4684, 8824, or Schedule D as the information does not transfer to that form from the Sale of Business Property form.
If you are reporting this on Form 8824 Like-Kind Exchanges:
The amount on Line 25 of Form 8824 is the basis you would use to enter the acquired asset for depreciation purposes.