Glossary
1031 exchange
Also called Like-kind exchange
Definition
A 1031 exchange defers capital gains tax when investment or business real property is exchanged for like-kind real property. Strict deadlines apply: 45 calendar days to identify, 180 to close2026 · IRS, and a qualified intermediary must hold the proceeds.
How 1031 exchange works
Cash or other property received, called boot, is taxable. Deferred gain reduces basis in the replacement property.
Personal residences don't qualify.
Why it matters to a firm
Exchanges must be structured before closing; early CPA involvement prevents costly errors.
| 2026 figure | Source |
|---|---|
| 1031 exchange identification and exchange periods: 45 calendar days to identify, 180 to close | IRS |
Questions about 1031 exchange
What are the deadlines?
45 calendar days to identify, 180 to close2026 · IRS.
Do I need an intermediary?
Yes.
Is tax eliminated?
No, deferred.
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Related terms: Boot
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