1031 exchanges, explained without the jargon

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A 1031 exchange (named after the section of the tax code) lets an owner sell an investment property and reinvest the proceeds into another investment property while deferring the capital-gains tax. Done right, your equity rolls forward intact instead of shrinking by a tax bill.

The basic idea

Instead of cashing out, you swap into a new investment property of equal or greater value. The gain isn’t erased, it’s deferred, so more capital stays invested and compounding.

The rules that trip people up

A 1031 has strict mechanics, and missing one can blow the deferral:

• Tight timelines. There are firm windows to identify and then close on the replacement property after your sale. They’re shorter than most people expect.
• A qualified intermediary is required. You generally can’t touch the sale proceeds yourself; a neutral third party holds them.
• Like-kind, investment-use property. This is for investment/business real estate, not your primary home.
• Equal-or-greater value to fully defer the gain.

Is it right for you?

A 1031 is powerful if you want to stay invested in real estate. If you’d rather get out of being a landlord entirely, other deferral structures might fit better. We help you understand the trade-offs in plain language and connect you with the right professionals to execute.

Curious whether a 1031 fits your situation? Start a conversation.