1031 Like-Kind Exchange
A tax-deferred exchange under Internal Revenue Code Section 1031 for qualifying like-kind real property held for business or investment.
Quick flashcard
What does 1031 Like-Kind Exchange mean on the Texas real estate exam?
Answer: A tax-deferred exchange under Internal Revenue Code Section 1031 for qualifying like-kind real property held for business or investment.
Read the explanation below, then return to the full flashcard deck and try it again from memory.
1031 Like-Kind Exchange definition
A 1031 exchange, named for Section 1031 of the Internal Revenue Code, lets an investor defer capital gains tax by exchanging one investment or business-use property for another like-kind property, following strict timing and reinvestment rules.
It defers the tax rather than eliminating it. Property held only for personal use does not qualify while it is held for that purpose.
Source basis
Definition checked against the official sources below on .
On the exam
Exam trap
Tested in
Ownership & Title (9 of 80 National)
From definition to recall
See this term inside a real exam question.
Pass Texas gives you Texas-specific practice, diagnostics across the 14 exam areas, Trap Library, Math Coach, offline access, and one $59.99 purchase. No subscription. No copied exam questions.
Try 5 free questionsThis definition is Texas real estate exam-prep education, not legal, tax, or professional advice. Verify current rules against the official source before relying on them for a real transaction. Back to the full glossary.