It used to be that the term “Section 1031 Exchange” or even “Like-Kind Exchange” was uncommon except in certain circles. But as the idea of tax strategies have reached more and more taxpayers coupled with the housing market’s fluctuation in recent years, 1031s have become increasingly commonplace. So, what is a 1031 Exchange? In its broadest terms, a 1031 Exchange is the trade of one investment property for another. When most people think of trading one property for another, we think in terms of selling one property, paying any applicable taxes and then buying a new property in a separate transaction. With the 1031, this is not the case. If your transaction meets the 1031 requirements, you will have limited to no tax due at the time of the exchange. In other words, you are changing your investment without cashing out or recognizing capital gains. This is a good strategy for someone that wants to remain an investor but may no longer have an interest in their current property portfolio. As there is no limit on the number of times you can perform a 1031 exchange, the investment you originally had will continue to grow tax deferred until such time as you eventually sell. This can provide time to create a sound plan and tax strategy for paying the long-term capital gain rate at the time of sale.