What Is a 1031 Exchange?
Answer
A 1031 exchange lets an investor defer capital-gains tax by reinvesting the proceeds of a sold investment property into a "like-kind" property within strict IRS timelines (45 days to identify, 180 days to close). It defers, not eliminates, the tax.
Named for Section 1031 of the tax code, the exchange lets investors compound gains across properties without an immediate tax bill. The rules are technical and require a qualified intermediary, so investors coordinate closely with their CPA and attorney.
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