Reporting your 2023 1031 Exchange

If you sold property during 2023 and did a 1031 Exchange, you now need to report that exchange on your 2023 Tax Return.

You must report your exchange on your Federal Tax Return on Form 8824 (a link to the IRS website where you can review the form and instructions can be found here - 

Some of the information necessary in order to complete the form will be:

  • Details from the transaction where you sold your relinquished property
  • Details from the transaction where you acquired your replacement property
  • Information on the relinquished property, like your basis and amount of depreciation taken

Most states also have state taxes that you deferred through your 1031 Exchange. Do not forget to report the 1031 on your state tax return as well.

It is always recommended that as you are doing your 1031 Exchange, you are consulting with your tax professional so that they understand the additional reporting necessary on your returns. If you did not keep your tax professional informed, now is the time to work with them so that they are not surprised when tax filing time comes. 

As always, please consult with your tax advisor and the professionals here at Security 1st Exchange to should you have any questions.