What Is a 1031 Exchange?

At Biscayne Real Estate Group we can help you sell one property, and locate a new investment in Miami and all of Florida as needed.

• A 1031 exchange lets real estate investors swap one investment property for another and delay paying capital gains taxes.

• It’s named after Section 1031 of the IRS Code.

• "Like-kind" properties must be exchanged (real estate for real estate, not personal property).

• Properties must be located in the U.S..

Key Rules

• No limit on how often you can do 1031 exchanges.

• Replacement property must be identified within 45 days.

• Purchase must be completed within 180 days.

• If you get cash or debt relief ("boot"), you may owe some taxes.

• Depreciation recapture (taxed as ordinary income) can apply if swapping buildings for land.

Changes Since 2017

• Only real estate qualifies now (personal property like equipment no longer qualifies).

• Tenant in Common (TIC) real estate interests still qualify.

Types of Exchanges

• Delayed Exchange (most common): You sell your property, and a qualified intermediary holds the money to buy your replacement property.

• Reverse Exchange: You buy the new property first and then sell the old one — strict rules still apply.

Important Timing

• 45 Days: After selling your property, you must identify your replacement property in writing.

• 180 Days: You must close on the new property within 180 days of selling the old one.

• (These periods overlap — they both start from the sale date.)

Bottom Line:
A 1031 exchange is a powerful way to grow wealth through real estate without paying taxes immediately, but it requires strict timing and careful planning to qualify.