Tax-Free Swaps: Using Section 1031 Like-Kind Exchanges to Preserve Investment Net Worth

This diagrammed reference details the requirements and potential benefits of Internal Revenue Code section 1031. Because it is accessibile to billion-dollar corporations to individual property owners, section 1031 has been dubbed the "people's tax shelter." Originally enacted in 1921, section 1031 is the product of a fundamental principal of tax law: that a person should not pay gain-or-loss tax as long as the person remains invested in a single piece of property or property of a like kind. This guide explains how property owners can compute the tax benefit section 1031 provides, allowing them to make an educated decision as to whether to proceed with a section 1031 exchange.