# 1031 Exchange

*Real Estate — Finicade finance glossary*

A 1031 exchange defers capital gains tax on an investment property by rolling proceeds into another one within strict 45- and 180-day deadlines.

A 1031 exchange defers capital gains tax on an investment property by rolling the proceeds into another one within strict deadlines — 45 days to identify a replacement and 180 to close. A qualified intermediary must hold the funds; touching them yourself voids it. Combined with the step-up in basis at death, it allows a lifetime of deferred gains to disappear entirely, which is why it is perennially proposed for repeal.

**Also known as:** like-kind exchange, 1031, section 1031

**Related terms:** [Capital Gains Tax](https://finicade.com/glossary/capital-gains-tax), [Depreciation Recapture](https://finicade.com/glossary/depreciation-recapture), [Rental Property](https://finicade.com/glossary/rental-property), [Cost Basis](https://finicade.com/glossary/cost-basis), [Step-Up in Basis](https://finicade.com/glossary/step-up-in-basis)

Source: https://finicade.com/glossary/1031-exchange