1031 Like-Kind Exchange, plain English.

A 1031 exchange lets you defer capital gains tax on the sale of investment or business real estate by reinvesting the proceeds into like-kind property within strict deadlines, so the gain rolls into the new property rather than being taxed now. It is a core real-estate deferral strategy. We keep your property entities organized so an exchange runs cleanly.

Two strict clocks run from the sale: you generally must identify replacement property within 45 days and close on it within 180 days, and missing either usually blows the exchange, so timing is critical. We flag how the deadlines interact with your entity structure so an exchange is planned around them, not against them.

For real estate, like-kind is broad: most investment or business real property can be exchanged for other investment or business real property, so an apartment building can be exchanged for raw land or a rental, though personal-use property does not qualify. We flag whether your properties qualify so the exchange rests on eligible real estate.

Yes: a 1031 exchange generally requires a qualified intermediary to hold the proceeds between the sale and purchase, because touching the money yourself disqualifies the exchange. We flag how the intermediary fits and keep your entity side organized so the exchange mechanics are handled correctly.

Often yes, but how title is held matters: the same taxpayer generally must sell and buy, so if property is held in an LLC, the exchange is usually done at the entity level, and partnership situations get complex. We flag how your ownership structure affects the exchange so it is set up correctly.

Boot is any non-like-kind value you receive, such as cash or debt relief, and it is generally taxable to the extent received, so receiving boot means part of the gain is recognized. We flag how boot arises so an exchange is structured to defer as much gain as you intend rather than triggering unexpected tax.

No, it defers it: the deferred gain carries into the replacement property and is generally taxed when you eventually sell without another exchange, though some investors defer indefinitely by continuing to exchange. We flag that it is deferral, not elimination, so your planning reflects the eventual tax.

Because the same taxpayer must generally sell and buy, holding property in the right entity, and keeping partnership interests in mind, affects whether and how an exchange works. We keep your ownership organized so an exchange is not complicated by how title is held.

We keep your property-holding entities and records organized so an exchange runs cleanly, flag the deadlines, intermediary, and title considerations, and coordinate with your qualified intermediary and tax advisor, so the exchange side of your real estate is set up correctly. See real estate.