Are 1031 Exchanges Authorized?

Tax deferred exchanges are authorized by Section 1031 of the Internal Revenue Code. The requirements of 1031 and related code sections must be carefully met, but when done properly, the entire tax due on the sale can be deferred. It is important to remember the tax is not eliminated; it is only deferred, meaning you will have to address the issue some time in the future, usually when the new property is sold. It is imperative to seek the advice of a CPA well versed in real estate taxation before considering a 1031 exchange transaction.