Line 15 and line 18 follow the Instructions for Form 8824. The IRS like-kind exchange page states that gain is recognized to the extent of other property and money received, and a loss is not recognized. The walkthrough is in Partial 1031 exchange explained.
The form opens on a partial exchange. Sale price $500,000. Exchange expenses $30,000. Adjusted basis $280,000. Liabilities relieved $200,000. Replacement price $450,000. Liabilities assumed $180,000. Cash paid $0. Other property $0. No new cash is added. Transfer date November 2, 2026. Return due date April 15, 2027.
Cash received before expenses is $500,000 minus $200,000 of liabilities relieved, plus $180,000 of liabilities assumed, minus the $450,000 replacement, plus $0 of cash paid. That is $30,000. Net liability relief is $200,000 minus $180,000 minus $0, which is $20,000. Line 15 before expenses is $30,000 plus $0 of other property plus $20,000, which is $50,000, the same as the value gap. Exchange expenses of $30,000 reduce line 15 to $20,000 of boot. Cash you keep is $0. The $20,000 is the debt that was not replaced.
Realized gain is $500,000 minus $30,000 minus $280,000, or $190,000. Recognized gain is the smaller figure, $20,000. Deferred gain is $170,000. The replacement is short of the sale price by $50,000, so the replacement value test does not pass. That $50,000 gap is not the boot. After the netting above, the gap left on line 15 is $20,000.
Written identification is due December 17, 2026. Day 180 is May 1, 2027. The return due date, April 15, 2027, is earlier, so the receipt deadline is April 15, 2027.
In the IRS instructions example, Taylor's line 15 is the $40,000 cash received, line 19 is $120,000, and line 20 is $40,000. This page does not compute line 21, so the deferred illustration for that example is $80,000.
Boot on this page is Form 8824 line 15. It adds cash you would receive before expenses, the fair market value of other non-like-kind property, and net liability relief, then subtracts exchange expenses, not below zero. Recognized gain cannot exceed that line 15 amount.
Deferred gain is realized gain minus recognized gain. Realized gain follows Form 8824 line 19. Recognized gain is line 20, the smaller of line 15 and line 19, and not below zero. The deferred figure matches line 24 only when line 23 equals line 20. This page does not compute line 21 recapture.
The replacement value test compares the replacement price with the sale price of the property you give up. The gap is the amount the replacement falls short. Exchange expenses can reduce line 15, so a gap that is only those expenses may leave boot at zero if debt is replaced and you take no cash.
Written identification is due 45 days after you transfer the property you give up. You must receive the replacement by the earlier of 180 days after that transfer or the due date of the return for that year, including extensions. If you receive the replacement inside the 45 days, the instructions treat identification as met.
Read the rules in Partial 1031 exchange explained, then the cost side in Partial 1031 exchanges and real costs.
Underwrite the replacement in the cap rate calculator and the cash flow analyzer. NOI, the numerator of cap rate, is in Net operating income (NOI). The checklist, which is not this calculator, is the 1031 checklist.