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Tax strategies
1031 Exchange
Sell an investment property and roll the capital into the next one — legally deferring capital-gains tax.
What it is
A 1031 Exchange (IRC §1031) lets you sell an investment property and roll the proceeds into a new one while deferring capital-gains tax. It is not a loophole — it is a legal tool investors have used for decades.
Why it matters
- Your full capital keeps working instead of losing 20–37% to tax each sale
- Scale the portfolio: condo → duplex → income building
- Heirs may receive a step-up in basis, resetting the deferred gain
Key rules
- 45 days to identify the replacement property
- 180 days to close
- Properties must be like-kind (investment, not your home)
- A Qualified Intermediary is required
Educational only. Exact numbers and eligibility — with your CPA.