What Is a 1031 Exchange?

A 1031 exchange allows investors to defer capital gains taxes by reinvesting proceeds from the sale of one investment property into another “like-kind” property. This strategy helps preserve capital that would otherwise go to taxes, enabling investors to grow portfolios faster.

In my experience, timing and planning are everything with a 1031 exchange. Investors have 45 days to identify a replacement property and 180 days to close. The rules are strict, but when executed correctly, a 1031 exchange can accelerate long-term wealth building and portfolio expansion.