If you exchanged one investment or business property for another qualifying property, you may need to file Form 8824, Like-Kind Exchanges. This form is used to report the exchange and calculate any taxable gain that must be reported on your 2026 tax return.
A like-kind exchange under Internal Revenue Code (IRC) Section 1031 allows eligible taxpayers to defer taxes on certain gains when they exchange qualifying real property for other qualifying real property.
Who Must File Form 8824?
You may need to file Form 8824 if you completed a qualifying like-kind exchange during the tax year. Taxpayers who commonly file this form include:
- Individuals
- S Corporations
- C Corporations
- Partnerships
- Limited Liability Companies (LLCs)
- Trusts
- Other entities that complete a qualifying Section 1031 exchange
What Property Qualifies for a Like-Kind Exchange?
To qualify for like-kind exchange treatment, both the property you give up and the replacement property must generally:
- Be real property located in the United States
- Be held for use in a trade or business, or
- Be held for investment purposes
For federal tax purposes, Section 1031 exchanges currently apply only to qualifying real property. Personal property exchanges no longer qualify.
Property That Does Not Qualify
Certain types of property are specifically excluded from like-kind exchange treatment, including:
- Interests in a trust as a beneficiary or certificates of trust
- Partnership interests
- Inventory or stock in trade
- Stocks, bonds, and notes
- Other securities or debt instruments
Are There Time Limits for a Like-Kind Exchange?
Yes. The IRS imposes strict deadlines for Section 1031 exchanges. In most situations, these deadlines cannot be extended except in limited circumstances, such as certain federally declared disasters.
45-Day Identification Period
You have 45 days from the date you transfer the relinquished property to identify potential replacement property.
The identification must:
- Be in writing
- Be signed by you
- Be delivered to a person involved in the exchange, such as the seller of the replacement property or a qualified intermediary
Providing the notice only to your attorney, accountant, real estate agent, or another person acting as your agent generally does not satisfy the IRS requirement.
180-Day Exchange Period
The replacement property must be received and the exchange completed by the earlier of:
- 180 days after the transfer of the relinquished property, or
- The due date of your tax return (including extensions) for the year of the exchange
Missing either deadline may cause the exchange to become taxable.
What Information Do I Need to Complete Form 8824?
To prepare Form 8824, gather the following information:
- Descriptions of the properties exchanged
- Dates the properties were identified and transferred
- Details about any relationship between the parties involved in the exchange
- The fair market value of like-kind and non-like-kind property received
- Any gain or loss on non-like-kind property transferred
- Cash received or paid
- Liabilities assumed or relieved as part of the exchange
- The adjusted basis of the property given up
- The realized gain or loss from the transaction
Having these details available before you start can help make completing the form much easier.
How to Enter Form 8824 in the Program
To report a like-kind exchange in the program:
- Select Federal
- Select Income
- Select Less Common Income
- Select Like-Kind Exchanges (Form 8824)
Important Reminder
Like-kind exchange rules can be complex, especially when cash, debt relief, multiple properties, or related parties are involved. Be sure to keep records of all exchange documents, settlement statements, and property identification notices in case the IRS requests additional information.