What Is a 1031 Tax Deferred Exchange?

Daniel Goodwin on
Published by Kiplinger
Published by Kiplinger
Dreading the capital gains tax on your investment property sale? A 1031 exchange offers relief. This powerful IRS provision lets investors defer taxes by swapping one investment property for another “like-kind” property. Despite the name, “like-kind” is surprisingly flexible—from apartments to raw land to Delaware Statutory Trust interests. You’ll have 45 days to identify replacement properties and 180 days to close. For real estate investors seeking to upgrade their holdings or transition to passive ownership without a hefty tax bill, the 1031 exchange is an essential wealth preservation strategy.