WHAT IS A 1031 EXCHANGE
A 1031 Exchange gets its name from Section 1031 of the U.S. Internal Revenue Code. It allows you to avoid paying capital gains taxes when you sell an investment property and reinvest the proceeds from the sale within certain time limits in a property or properties of like kind and equal or greater value.
4 EXCHANGE REQUIREMENTS
A 1031 Transaction must involve a transfer of Real Property.
That property must be held for a Qualified Purpose, either as an investment, or used in a trade or
The Relinquished Property must be Like-Kind with the Replacement Property.
The transaction must be an Exchange as distinguished from a sale with a new purchase.