What is a 1031 exchange?

A 1031 exchange, also known as a like-kind exchange, is a powerful tax-deferment strategy popular with experienced real estate investors. It allows you to defer capital gains taxes on an investment property when it’s sold—as long as the investor purchases another like-kind property with the proceeds of the first property sale.

Can I get a 1031 exchange if I own a business?

If you own business or investment property, then you may be able to benefit from a 1031 exchange. By buying another like-kind property of equal or greater value, you may be able to defer the capital gains tax bill into the future – or avoid capital gains taxes if you die before selling the last property.

Is a 1031 exchange a tax break?

A 1031 exchange is a tax break. You can sell a property held for business or investment purposes and swap it for a new one that you purchase for the same purpose, allowing you to defer capital gains tax on the sale.