Form 8824 is the document that actually reports a like-kind exchange to the IRS, and preparing it accurately depends entirely on whether the underlying transaction records were kept in usable shape through closing.
What Form 8824 Actually Requires
The form asks for a description of both the relinquished and replacement properties, the dates each was transferred and identified, whether either party was related to the taxpayer, and the figures needed to compute realized gain, recognized gain, and the adjusted basis carried into the replacement property. Getting those figures right depends on accurate settlement statements and a clear boot calculation from both sides of the exchange, which is why documentation assembly and boot review typically happen before the form itself is drafted.
Documents the Preparer Will Ask For
A CPA preparing Form 8824 will generally request:
- Legal descriptions and closing dates for both relinquished and replacement property
- Final settlement statements from both transactions
- The written identification notice and its delivery date
- Any debt payoff or new loan documents affecting basis
- Confirmation of related-party status, if applicable
Multi-Asset and Multi-Property Exchanges on One Form
Investors who relinquish or acquire more than one property in a single exchange, common under the 200 percent or 95 percent identification rules, need each property pairing reflected accurately, and DST interests require the sponsor's reporting package to translate a fractional trust interest into figures the form can actually use. A file organized by property from the start makes this considerably easier than trying to sort it out after the fact.
Coordinating With the Investor's Tax Preparer Before Filing
Because Form 8824 feeds directly into the investor's federal return, the preparer needs the completed exchange file well before the filing deadline, not the week it's due. Flagging any open question, an unresolved boot calculation, an ambiguous related-party issue, or a missing settlement figure, as a separate item lets the CPA make the call rather than guessing at a figure under time pressure.
Basis Records the Replacement Property Carries Forward
The adjusted basis calculated on Form 8824 doesn't end with the filing, it becomes the starting point for depreciation on the replacement property and for any future exchange out of it. An investor who later refinances, improves, or sells the Washington replacement property will need that original basis figure again, along with the settlement statements and boot calculation that produced it.
Keeping a copy of the filed form together with its supporting settlement statements in the same file as the property's ongoing depreciation records, rather than treating the exchange paperwork as closed once the return is filed, saves a CPA from having to reconstruct the basis calculation years later when the property is sold or exchanged again.
This matters even more for a DST allocation, since the sponsor's own reporting package translates the trust-level basis into the investor's share, and that translation needs to be reconciled with the figures already reported on Form 8824 rather than treated as a separate, unrelated document. An investor who exchanges into a DST and later exchanges out of it will need both the original form and the sponsor's basis schedule to prepare the next Form 8824 accurately.
Investors filing across more than one exchange in the same tax year, whether from multiple relinquished properties or a portfolio-style acquisition, should confirm with their preparer early how many separate Form 8824 filings the return actually requires, since combining figures from unrelated exchanges onto one form is a common and avoidable error.
A short summary sheet listing each exchange separately, its relinquished property, replacement property, and key dates, handed to the preparer alongside the underlying settlement statements tends to prevent that kind of mix-up better than relying on the preparer to sort it out from a single combined stack of documents, particularly in a year with more than one closing, when settlement statements from unrelated properties can otherwise end up mixed together in a single inbox and are harder to separate correctly the longer that mix-up sits unresolved.
Common 1031 Exchange Questions
Do I file Form 8824 with the return for the year I sold, or the year I bought?
It's filed with the tax return covering the year the relinquished property was sold, even if the replacement acquisition and the rest of the 180-day window extend into the following year.
What if my exchange involved a related party?
Form 8824 requires disclosure of related-party transactions, and additional holding-period rules apply. This is a question for the investor's tax advisor early in the process, not something to resolve after the form is drafted.
Does a partial exchange with some boot still get reported on Form 8824?
Yes. The form is designed to report the like-kind portion and the boot portion together, computing recognized gain on the boot while deferring gain on the like-kind exchange itself.
Can my CPA prepare Form 8824 without the exchange agreement?
It's possible but not advisable. The exchange agreement establishes the structure the IRS expects to see reflected on the form, including the intermediary's role, so it should be part of the file the preparer reviews.
What happens if Form 8824 is filed with an error?
An amended return can often correct a factual error, but the process is easier when the original exchange file is complete, since the preparer can trace the correction back to the actual settlement figures rather than reconstructing them.