A 1031 Exchange takes its name from Section 1031 of the Internal Revenue Code. This is a tax-deferred exchange that allows a taxpayer to sell income, investment or business property and replace it with a like-kind property. This strategy additionally allows an investor to “defer” paying capital gains taxes on an investment property when it is sold, as long as another “like-kind property” is purchased with the profit gained by the sale of the first property.
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