Do you own a property that has increased in value and you would like to sell, but you do not want to pay the capital gains tax?  Even with low capital gains rates, on a $1,000,000 gain, you would still pay over $200,000 on 15% federal and 6% state taxes.  Instead, you can roll this gain into another like-kind investment that could even be your retirement home.  How?

A 1031 Exchange comes from Section 1031 of the IRS code and allows a sale to be structured so the gain on certain kinds of property that are being sold are not currently taxed.  Instead, the property can be “exchanged” for a “like kind” investment, so the seller’s gain is deferred to a future date. 

“Like kind” does not mean an apartment for an apartment or an office for an office, but rather can be different types of properties as long as they are being used for investment purposes, so “like kind” can mean any type of investment property.  In addition, there are ways to buy a property as an investment property that could later be rolled into a permanent residence so the taxes on the gains could be avoided forever.