Form 8824 Like-Kind Exchanges

A like-kind exchange lets you trade one property for another and defer the gain, if the rules are met. Form 8824, Like-Kind Exchanges, reports the exchange. For exchanges after 2017, the rule covers only real property held for use in a business or for investment. Real property held mainly for sale does not qualify. IRS: Instructions for Form 8824 (2025)

What counts as real property

Real property includes land and buildings, and some items built into a building that are permanent parts of it. The instructions say real property in the United States and real property outside the United States are not like-kind to each other. Equipment, vehicles, and other personal property do not qualify under this rule. IRS: Instructions for Form 8824 (2025)

The timing rules for a deferred exchange

Most exchanges are deferred. The new property does not arrive on the same day the old property leaves. In that case, two deadlines apply:

You must identify the replacement property in writing within 45 days after you transfer the property you gave up.
You must receive the replacement property within 180 days after that transfer. If your return is due earlier, including extensions, the earlier date controls.

If you use a qualified intermediary, the instructions treat the transfers as a like-kind exchange. If the timing rules are missed, the exchange may not qualify, and the gain may be taxable in the year you transferred the old property. IRS: Instructions for Form 8824 (2025)

Cash and other property you receive

If you get cash, or property that is not like-kind, along with the replacement property, some gain may be taxable right away. Form 8824 has lines that compare the gain with what you received. In general, the taxable gain is limited to the cash and other non-like-kind property you get, up to the total gain. IRS: Form 8824 (2025)

How the form is organized

Part I covers the details of the exchange, such as the dates you identified and received property. Part III figures the gain you must recognize, which is the amount taxed now. IRS: Instructions for Form 8824 (2025)

Depreciation recapture

If the property you give up has been depreciated, recapture may apply. Part III of the form has lines 21 through 23 for section 1245 and section 1250 property. Any recaptured amount is taxed as ordinary income. IRS: Instructions for Form 8824 (2025)

For how sales of business property are reported, see Form 4797 basics.

Special rules apply when the exchange is with a related party. A related party includes a spouse, child, grandchild, parent, grandparent, brother, or sister. Line 7 of the form covers these exchanges. The instructions also say you may need to file Form 8824 for each of the 2 years after the year of the exchange, in some cases. IRS: Instructions for Form 8824 (2025)

Rental property

If the property you give up or receive is a rental, income and expenses still go on the rental reporting forms. See rental income and Schedule E basics.

Keep your records

Keep the written identification notice, the closing papers for both properties, any agreement with a qualified intermediary, and the basis records for the property you gave up. These papers support the dates and amounts you enter on Form 8824.

Steps to follow

Confirm that both properties are real property held for business or investment.
Write down the transfer date, and track the 45-day and 180-day deadlines.
Note any cash or other non-like-kind property you received.
Complete Form 8824 for the year, and carry the results to your return as the form directs.

General information, not advice for your situation.

Sources: Sources: IRS, Instructions for Form 8824 (2025) (https://www.irs.gov/pub/irs-pdf/i8824.pdf); IRS, Form 8824 (https://www.irs.gov/pub/irs-pdf/f8824.pdf) This is general information, not advice about your specific return.

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