A 1031 Exchange is an investment tool that should be used when someone wants to buy and sell more property. Instead of selling, paying taxes, and then acquiring other properties, you can avoid the tax payments by exchanging properties. The basic rules are:

• Something must be given away, and something received
• The exchanged property must be a like kind. Any property used in a trade, business or for investment may be exchanged for another property used in a trade, business or for investment.
• To ensure a fully tax deferred exchange, property value, equity and mortgage must move straight across or up in value from one property to the next
• There must be continuity of vesting throughout the exchange – the same entity that gives up the relinquished property must receive the replacement property.
• The replacement property must be identified within 45 days of the relinquished property closing date and received within 180 days of that same closing date.