1031 Exchanges

A 1031 exchange, otherwise known as a tax deferred exchange, is a simple strategy and method for selling one property, that's qualified, and then proceeding with an acquisition of another property (also qualified) within a specific time frame.  One of these provisions in the IRS Code, Section 1031, provides that no gain or loss will be recognized on the exchange of property held for productive use in a trade or business, or for investment, so long as the property is exchanged for like-kind property. There are lots of exceptions and limitations, but, for our purposes, all you need to know is that all investment real estate qualifies under this provision.