1031 Like-Kind Exchange
A tax-deferred exchange under Internal Revenue Code Section 1031 that lets an investor reinvest proceeds from one investment property into another like-kind property.
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.
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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.