What is a 1031 Exchange?
A 1031 Exchange is derived from Section 1031 of the IRS code which allows property owners to sell a real estate investment property and defer any taxes that may be owed by purchasing a new investment property of equal or greater value.
A 1031 exchange may also be referred to as a “like-kind” exchange or a Starker; it can be explained as a swap from one investment property for another.
If used correctly, there is no limit on how frequently a 1031 exchange may be done. For decades, 1031 exchanges have been an effective wealth–building tool for real estate investors across the country.