1031 Exchange
A 1031 Exchange is a US tax benefit that allows investors to defer capital gains on the sale of one property when a similar property is purchased.
- Effectively allows an investor to continuously defer paying taxes on the gain by rolling the gains into the costs basis of the new property
- Historically was available for multiple asset types including real estate, art, and collectibles
- The Tax Cuts and Jobs Act of 2017 limited the 1031 exchange to real estate only
- This applies to US federal tax law