A 1031 exchange is a tax-deferral strategy that lets you sell investment or business real estate and reinvest the proceeds into other “like‑kind” real property without immediately paying capital gains or depreciation recapture tax. When structured correctly, it can preserve equity, increase cash flow, and help you scale or reposition your portfolio over time.​ What a 1031 Exchange Is A 1031 exchange (also called a like‑kind exchange) comes from Section 1031 of the Internal Re

For example, an apartment building can be exchanged for raw land, a commercial property for a residential property, etc.