A 1031 tax-deferred exchange allows a taxpayer to exchange investment property for like-kind property and defers the payment of capital gain taxes. 1031 exchange (also referred to as a "Starker Exchange") gets its name from the section 1031 of the Internal Revenue Code. The law allows capital gains taxes on investment properties to be deferred if the property is traded for one of "like-kind". More than one property may be traded in a like-kind exchange. Strict guidelines govern when the properties can be exchanged and how the exchange will be reported to the IRS. Consult a qualified Realtor and your tax accountant for more information.
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