How the Like-Kind Exchange Defers Capital Gains on Investment Property

In this episode of The Tax Strategy Podcast, Lucas and Luna break down Section 1031 of the tax code — the like-kind exchange — and how real estate investors use it to defer capital gains taxes indefinitely. They walk through the mechanics: the 45-day identification window, the 180-day exchange period, and the strict rules for replacement property. Lucas explains why this strategy is often called the 'ultimate deferral' and contrasts it with a straight sale. They also discuss the 2017 tax reform that limited Section 1031 to real estate only, eliminating it for art, collectibles, and heavy equipment. A concrete example ties it together: an investor who bought a duplex for $400,000, sells it for $1.2 million, and rolls all proceeds into a four-unit apartment building — deferring over $200,000 in capital gains tax. The episode also covers the risks of boot, mortgage relief, and the death step-up that can make the deferred gain disappear entirely. #1031Exchange #LikeKindExchange #RealEstateTax #CapitalGainsDeferral #Section1031 #TaxStrategy #InvestmentProperty #DeferredTax #Boot #StepUpInBasis #RealEstateInvesting #QualifiedIntermediary #IRS #TaxDeferral #Finance #TaxPlanning #FexingoBusiness #BusinessPodcast Keep every episode free: buymeacoffee.com/fexingo