Enter the exchange figures for a relinquished property and hand the carryover basis to its replacement.
Where this is in the app
Dashboard → open the return → Assets tab → open the asset → Dispose → Disposition Kind → Like-kind exchange (§1031)
New to the disposal screen? Start at Record a disposal.
Choose Like-kind exchange (§1031) in the Disposition Kind dropdown and a dedicated step opens below the disposal form, headed Like-kind exchange — §1031 (Form 8824 Part III). The Record disposal button is replaced by a line reading "Complete the §1031 exchange step below to record this like-kind exchange."
The step opens for a full-asset disposal of real property (recovery period 27.5, 30, 39, or 40) that has not already been disposed. On any other asset, see "If the step doesn't open" below.
Steps
Fill in Exchange details. The step asks for these, in this order:
Read the Gain, recapture & basis breakdown. It updates as you type and shows each step of the derivation as a sentence, ending in the §1031(d) carryover basis that will be handed to the replacement asset. A key-figures table underneath repeats realized gain, net boot, recognized gain, deferred gain, and the carryover basis.
Override the net boot if you need to. An optional Net boot override field replaces the computed figure in the rest of the math. The computed figure stays visible so you can see both.
Record the disposition. The button reads Record §1031 disposition & build replacement. The step records it without leaving the page, then mounts the replacement preview.
Review and accept the replacement asset. See Build the replacement asset.
If the carryover basis lands at or above the replacement cost while a gain is still deferred, the step raises an amber sanity check asking you to re-check the inputs.
What the product does and does not do here
DepreciationPro computes the deferred gain and the carryover basis that rides into the replacement property. It does not file Form 8824 and it does not track exchange identification or closing deadlines. Those stay with your tax software or preparer.
That note is carried on the Reports tab and in the Dispositions worksheet rather than on this step.
If the step doesn't open
Pick Like-kind exchange on an asset that is not real property and the product shows an amber panel headed This isn't a §1031 like-kind exchange, naming the asset's recovery period. A Switch to sale button drops the kind back to Sale and re-runs the normal preview.
Use that button. The Record disposal button stays available next to the panel, and clicking it records the disposal as a §1031 exchange labelled for Form 8824 on an asset the panel has just told you does not qualify.
Assets already recorded as like-kind exchanges are shown as they were saved. The step does not reopen for them and their figures are not recomputed.