Form 8824 Preparation Support

Form 8824 is the IRS form that reports a like-kind exchange, and it asks for specific dates, values, and debt figures that need to trace back to the closing documents rather than an estimate. The work here is assembling those inputs correctly so the tax advisor can prepare the return without reconstructing the transaction from scattered records first. Investors should have their CPA or tax advisor make the final calculations and file the form on their behalf.

The Six Dates Form 8824 Asks For

The form requires the relinquished property description and closing date, the identification date, the replacement property description and closing date, and confirmation that the 45-day and 180-day deadlines were met. A file missing even one of these dates, most often the identification date since it is not always documented as clearly as a closing date, forces the advisor to track down the qualified intermediary's records before the return can be finalized.

A simple dated log kept alongside the exchange file, noting the exact day the relinquished property closed and the exact day the identification notice went to the QI, removes the guesswork later. Recreating those two dates from memory months afterward is one of the more common reasons Form 8824 preparation stalls at tax time.

Value Inputs That Drive the Calculation

Beyond dates, the form requires the fair market value of both properties, adjusted basis in the relinquished property, liabilities assumed or relieved on each side of the transaction, and any cash or non-like-kind property received. A Northern Virginia investor exchanging out of a data-center-adjacent parcel with a complex depreciation history should expect the adjusted basis calculation to take longer than the exchange itself, since it depends on years of prior depreciation schedules.

Pulling the full depreciation schedule from every prior tax return covering the relinquished property, rather than only the most recent year, gives the advisor the complete basis history needed for this calculation, and gaps in that history are one of the more common reasons Form 8824 preparation takes longer than expected.

A Preparation Checklist Before the Advisor Meeting

Bringing the following to the first tax advisor meeting after closing shortens the preparation timeline considerably, and gathering it before the meeting rather than after avoids a second round-trip conversation.

• Relinquished and replacement property settlement statements
• Prior depreciation schedule for the relinquished property
• Loan payoff letter and new loan documents
• Written identification notice with its delivery date to the QI

Related-Party Exchanges Need Extra Documentation

If either the relinquished or replacement property involved a related party, Form 8824 includes additional questions about a two-year holding requirement, and the file should note the relationship explicitly rather than leaving the advisor to discover it during preparation. Related-party exchanges are more common in Virginia family-owned commercial portfolios, particularly Hampton Roads industrial properties passed between generations, and they carry closer IRS scrutiny than an arm's-length transaction.

A short written note describing the relationship, the reason for the transaction, and the intended holding period for each party gives the advisor useful context that a bare settlement statement cannot provide, and it can matter later if the two-year holding requirement is ever questioned.

Multiple Replacement Properties on One Form

An investor who closed on more than one replacement property under the 200 percent or three-property rule needs a separate worksheet reconciling each closing before the totals are entered on the single Form 8824 filed for the tax year, and any investor considering how boot, debt, or basis should be allocated across those properties should raise the question directly with their CPA before the return is filed.

A three-property Hampton Roads exchange, for example, might replace one relinquished asset with an office building, a retail strip, and a DST allocation, and each of those three needs its own basis and debt reconciliation before the combined totals make sense on a single form.

Common 1031 Exchange Questions

When is Form 8824 due for a Virginia investor's exchange?

Form 8824 is filed with the federal tax return for the year the relinquished property was sold, and if the 180-day exchange period extends past the original filing deadline, the investor generally needs to file an extension rather than submit the return before the exchange period fully closes out.

Does a Virginia state return require separate 1031 reporting?

Virginia generally follows the federal treatment of like-kind exchanges, but investors should confirm current state conformity rules with their tax advisor since state treatment of deferred gains can differ from the federal Form 8824 result.

What happens if Form 8824 is filed with an incorrect identification date?

An incorrect date can misstate whether the exchange met the 45-day requirement, which is why the identification notice delivered to the qualified intermediary should be the source document for that date rather than a recollection of when the search began.

Can a tax preparer complete Form 8824 without exchange-specific documents?

Technically a return can be filed with estimated figures, but doing so risks understating or overstating the deferred gain, so most advisors will not finalize the form until settlement statements, loan documents, and the identification notice are provided.

Should the qualified intermediary review Form 8824 before it is filed?

The QI is not typically involved in tax preparation, but confirming the exchange dates and dollar figures against the QI's own closing statement is a reasonable check before the tax advisor submits the final return.

Ready to organize the exchange file?