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ARTICLE · 14 NOVEMBER 2025

The Rules Of 1031 "Like Kind" Exchanges

Ward and Smith, P.A
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It is worth noting that a 1031 exchange is a tax-deferral technique, not a tax-avoidance technique, because any gain in the sale of the relinquished properties...

United StatesTax
Lee C. Hodge
Lee C. Hodge

A 1031 exchange is a tax-deferred exchange where a taxpayer sells one or more real estate assets held for productive use in a trade or business or for investment (referred to as the "relinquished property") and, subject to the 45 day identification and 180 day closing timing rules (as discussed below), re-invests all of the sales proceeds into new real estate assets of a "like kind" (referred to as the "replacement property").

It is worth noting that a 1031 exchange is a tax-deferral technique, not a tax-avoidance technique, because any gain in the sale of the relinquished properties are "locked in" at the time of the 1031 exchange and will carry over to the assets that are purchased as replacements.

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