Understanding 1031 Exchanges: A Key Tax Strategy for Real Estate Investors
JB
Jeremiah Boucher Founder, Patriot Holdings • Author of Finding Your Edge
Key Takeaways
- A 1031 exchange lets you defer capital gains by reinvesting proceeds into like-kind property within 180 days.
- You must identify replacement properties within 45 days — have your targets lined up before you close the sale.
- The exchange must go through a qualified intermediary — you can never touch the proceeds or the exchange is blown.
- Like-kind is broader than most people think — you can exchange a single-family rental into a commercial building or vice versa.
- Consider exchanging into a Delaware Statutory Trust (DST) or fund if you want to defer taxes without active management.