IRC Section 1031 Exchange
A 1031 exchange allows Florida real estate investors to defer capital gains taxes by reinvesting sale proceeds into like-kind replacement property. This powerful tax deferral tool is governed by Internal Revenue Code Section 1031 and requires strict compliance with identification and closing deadlines.
Requirements
- Both properties must be held for investment or business use
- Qualified intermediary (QI) must hold proceeds
- Replacement must be equal or greater value to defer all gain
- Real property only (personal property excluded since 2017)
Critical Deadlines
- 45-day identification: Written identification of replacement properties to QI
- 180-day closing: Replacement property must close within 180 days
- Deadlines are strict and non-extendable (except IRS disaster relief)
- Missing either deadline = fully taxable sale
Like-Kind Examples
- Single-family rental → Commercial building
- Vacant land → Apartment complex
- Warehouse → Retail center
- Florida property → Out-of-state property
Related Terms
- Capital Gains — Tax on profit
- Investment Property — Qualifying property
- Closing — Transaction completion
Barnes Walker 1031 Exchange Services
Barnes Walker’s real estate attorneys coordinate 1031 exchanges for investors throughout Southwest Florida. Request a legal inquiry for assistance.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC