Form 8824 - Like-Kind Exchange

Tax Reform Update: Generally, only real property now qualifies under the like-kind exchange rules. See the 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, 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:

  1. From within your TaxAct® return (Online or Desktop), click Federal. On smaller devices, click the menu icon in the upper left-hand corner, then select Federal
  2. Click Investment Income to expand the category and then click Like-Kind Exchanges (Section 1031) & Conflict-of-Interest Sales (Section 1043)
  3. Click +Add Form 8824 to create a new copy of the form or click Review to review a form already created 
  4. The program will proceed with the interview questions for you to enter or review the appropriate information

The amount on Line 25 of Form 8824 is the basis you would use to enter the acquired asset for depreciation purposes.