What is a 1031 exchange?
The 1031 exchange is an internal revenue code that allows an investor to sell a property and to buy another property and the capital gains could be reinvested in that and don't have to be taxed. There are a couple of rules that you have to follow. Firstly, it has to be the same tax payer that sells a property has to be buying the property. Secondly, there is a 45 day identification period. Thirdly, 180 days is the time frame for buying the other property, and fourthly, you have to have what is called the trade-up definition, and the next asset has to be the same price or greater.