Form 8824, Like-Kind Exchanges, is the IRS form you file for the year you swap business or investment real property for other real property of a like kind under section 1031. It works out how much gain is deferred, how much is taxable now if you also received cash or other property, and your basis in the property you received. Since 2018, only real property qualifies.
That last change is still the biggest surprise for people who remember swapping equipment or vehicles tax-free. Everything below comes from the IRS instructions for Form 8824 for 2025, current as of October 2026.
What counts as like-kind
Real properties are generally like-kind to each other, whether improved or unimproved, so an apartment building can be exchanged for raw land. Real property held primarily for sale doesn't qualify, and the one geographic catch is firm: real property in the US and real property outside the US aren't like-kind.
| Usually real property for section 1031 | Never real property for section 1031 |
|---|---|
| Land and buildings | Ordinary stock, bonds or notes |
| Structural components such as wiring or plumbing | Partnership interests, in most cases |
| Easements and options to buy real property | Certificates of trust or beneficial interests |
| Stock in a cooperative housing corporation | Other securities or evidences of debt |
The 45 and 180 day deadlines
Most exchanges are deferred: you sell first and buy later, usually through a qualified intermediary so you never touch the sale proceeds. The timing rules are strict.
- Identify the replacement property within 45 days after you transfer the property you're giving up.
- Receive the replacement property within 180 days, or by the due date of your return including extensions, whichever is earlier.
- Report both dates on lines 5 and 6 of Form 8824.
Here's the trap inside step 2: a sale late in the year can see its 180 days cut short by your return due date unless you extend. And related parties and your own agents can't act as your intermediary; the IRS calls them disqualified persons.
Boot: when part of the gain is taxed now
If you receive cash or other property that isn't like-kind on top of the replacement property, that's commonly called boot. Gain is recognized up to the value of the boot, but a loss isn't recognized. Part III of the form works this out and also gives you the basis of the new property, which carries the deferred gain forward.
Personal property that comes along with the real property, such as furniture in a rental, can be disregarded in a deferred exchange through an intermediary if it doesn't exceed 15% of the value of the real property received.
Exchanges with related parties
A related party includes your spouse, child, grandchild, parent, grandparent, brother or sister, and related corporations, partnerships, trusts and estates. You file Form 8824 for the year of the exchange and for the 2 years following, and if either side disposes of the property in that window, the deferred gain can come back. An exchange structured to dodge these rules isn't a like-kind exchange and doesn't go on the form at all.
Part III in plain terms
- Start with the fair market value of the other property you gave up, if any, and its adjusted basis, to catch any gain or loss on that piece.
- Add up the cash and other non-like-kind property you received, net of exchange expenses, to find the boot.
- Compare the value of everything you received with the adjusted basis of what you gave up: that's your realized gain.
- The recognized gain is the smaller of the realized gain and the boot; the rest is deferred.
- Work out the basis of the like-kind property you received, which is lower than its value by the deferred gain.
If you exchanged a property that was also your home at some point and you qualify for the section 121 exclusion, the 2025 instructions now give e-filers a write-in space on line 19 for Section 121 exclusion and the amount. You don't reduce line 19 itself by the exclusion. If you made several exchanges in the year, you can file one summary Form 8824 with your own statement giving the details of each.
Want AI doing the heavy lifting in your marketing?
I build the systems that handle the boring 80 percent, so you get your week back. Done properly, with the human kept in.
How the form is laid out
- Part I: the properties given up and received, and the key dates.
- Part II: related party exchange information.
- Part III: realized gain or loss, recognized gain, deferred gain and the basis of the like-kind property received.
- Part IV: an election used only by certain federal executive branch officials and judges for conflict-of-interest sales.
Recognized gain from Part III then flows to Form 4797 or Schedule D, depending on the property. If you also rent the new property out, its income and depreciation run through Schedule E from the date you receive it.
The verdict
A 1031 exchange is a deferral, not a gift: your lower basis follows you into the new property. If you're planning one, line up the intermediary before you sell, diarize day 45 and day 180, and extend your return if the sale closes late in the year. And if the replacement property is abroad, stop, because it won't qualify. Keep the closing statements, the intermediary agreement and your identification letter together, since they're the evidence for every date on the form. If you missed the 45-day window, don't report the deal as an exchange; treat it as a sale.
Frequently asked questions
What is Form 8824 used for?
It reports each exchange of business or investment real property for like-kind real property and figures the gain deferred and the basis of the property received.
Can I do a like-kind exchange with equipment or vehicles?
Not since 2018. Section 1031 treatment applies only to exchanges of real property held for use in a trade or business or for investment.
What are the 45 and 180 day rules?
Replacement property must be identified within 45 days after you transfer the property given up and received within 180 days, or by your return due date including extensions if earlier.
Is US property like-kind to foreign property?
No. Real property in the United States and real property outside the United States aren't like-kind properties.
How long do I file Form 8824 after a related party exchange?
You file it for the year of the exchange and for the 2 years following the year of a related party exchange.
