1031 Exchange that started in 2024 & completed in 2025

[kashblack1953]

Did a 1031 exchange on vacant land, the parcel that was given up closed escrow in 8/21/2024, replacement was identified on 8/23/2024 and I closed on the replacement on 1/16/2025. Funds from the property given up were held by a qualified intermediary in the time between closing on the given up property and closing on the replacement property. I have no relationship with either the buyer of the property given up or the seller of the replacement property, so I clicked "no" on "was this exchange being made with a related party". Now I am getting an error on Form 8824 "Form 8824 should not be completed if the exchange was made in a prior year and was not made with a related party. Verify exchange dates or remove Form 8824". How do I resolve this?

[Hi Palms · Accepted solution]

You should have reported this exchange on your 2024 tax return. 1031 exchanges that are started in one tax year and completed in the next are normally reported in the tax year in which the property is relinquished.

[Mike9241]

Wrong year, the 8824 should have been filed in 2024, even though the replacement property was acquired in 2025

[kashblack1953]

Yes, I just realized that. Can I just file the 8824 as an amended 2024 return? It doesn't change the tax liability. Do I need to print & mail the entire return, or just the form 8824 and a cover letter?

[kashblack1953]

Yes, I just realized that. Can I just file the 8824 as an amended 2024 return? It doesn't change the tax liability. Do I need to print & mail the entire return, or just the form 8824 and a cover letter?

[Hi Palms]

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@kashblack1953 wrote:

....or just the form 8824 and a cover letter?

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You could probably handle it that way but it would be safer to file a 1040-X and include the 8824. That would be a print and mail proposition but at least safe. The 8824 and cover letter alone could easily get totally lost and probably would.