What is a 1031 Exchange?
Allows an owner of investment property to exchange property and defer paying federal and state capital gains taxes(including recapture) if one purchases like kind property following the rules of the Internal Revenue Code(IRC). Section 1031 of the Internal Revenue Code, 26 U.S.C. § 1031, provides: "No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held either for productive use in a trade or business or for investment."