A 1031 exchange, also known as a like-kind exchange, is a tax-deferral strategy in the United States used in real estate investment.
It allows property owners to sell a property and reinvest the proceeds in another property of equal or greater value, deferring capital gains taxes that would typically be due upon the sale.
To qualify for a 1031 exchange, the properties involved must be of like kind and meet certain guidelines. This strategy is commonly used by investors to leverage their real estate investments and defer tax liabilities, potentially increasing overall returns.