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.
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, and it does not apply to a personal residence.
On the exam
Exam trap
Tested in
Ownership & Title (8% of the exam)
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 questionsRelated terms
- Cash Flow
The money left after subtracting operating expenses and mortgage debt service from a property's income.
- Leverage
The use of borrowed money to control a larger investment, which can magnify both returns and risk.
- Homestead Exemption (Texas Tax)
A Texas property tax break that lowers the taxable value of an owner's primary residence, reducing the school and other taxes owed.
This 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.