Form 8824 is generally used to report the exchange of business or investment property for property that is of a like kind. It is also used to report conflict of interest sales. The important point about this form is that the taxpayer often does not have to recognize gain or loss on the like-kind exchange. However, the taxpayer may have to recognize gain to the extent of other property or money received. Figuring out the amount of gain or loss involves such concepts as "adjusted basis," "fair market value," and "boot."
Realized gain or loss in line 19 is calculated by subtracting line 18 from line 17.
The amount in line 18, which represents the sum of (1) the adjusted basis of the like-kind property you gave up, (2) the net amounts you paid to the other party, and (3) any exchange expenses not used on line 15, summarizes the important financial characteristics of what you gave up.
The amount on line 17, which represents the sum of lines 15 and 16, summarizes the important financial characteristics of what you received.
Realized gain or loss in line 19, then, is an amount that shows the difference between what you received and what you gave up. Whether such a gain has current tax significance (i.e., is recognized) depends on the amount of recognized gain in line 23.