1031 Exchange
U.S. Internal Revenue Code Section 1031 permits the deferral of capital gains taxes on the sale of property held for investment or productive use in a trade or a business in a like-kind exchange. With a 1031 exchange, property owners can sell their real estate and then reinvest the proceeds in ownership of a like-kind property or up to three like-kind properties, thus deferring the capital gains taxes. The owner must identify the property(ies)/properties within 45 days and close within 180 days. 1031 exchanges are legal transactions and require a 1031 intermediary. (Davis, 2025)