@randoodle wrote:
If you gave up a property in 2020, but received a property in 2021; the exchange would have been for TY2021. Why (and how) did you file an 8824 for TY2020 when the exchange did not take place yet? 1031 exchanges are tricky timewise. You may need to consult a CPA on this one, especially to ensure that you are meeting the 45-day and 180-day rules.
I wholeheartedly agree with consulting a CPA for this scenario.
Regardless, the exchange is reported (on Form 8824) in the tax year in which the relinquished property is given up. If the property was relinquished in 2020, then the exchange would be reported on Form 8824 with the taxpayer's 2020 return. The exchange then needs to be completed by the filing deadline for the 2020 return or 180 days after the sale of the relinquished property (some taxpayers have to file for an extension if the property is relinquished late in the tax year).
It is not unusual for an exchange to span two tax years, but the transaction must be reported in the tax year when the exchange began, which is not necessarily the same tax year the replacement property is received.
