Knowledge Focus: 1031 Exchange
1031 Exchange
A 1031 Exchange is a tax aspect of the Internal Revenue Code to allow a real estate investor who meets all the requirements to sell their property and defer paying taxes on the gain. By completing an exchange, the owner can dispose of their investment property, use all of the equity to acquire replacement investment property, defer the capital gain tax that would ordinarily be paid, and leverage all of their equity into the replacement property.
Two requirements must be met to defer the capital gain tax: 
the exchanger must acquire a like-kind replacement, and 
the exchanger cannot receive cash or other benefits from such exchange
