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A 1031 exchange lets an investor sell a property and roll the full proceeds into the next one without paying capital gains tax up front. Understand it, and you become the agent investors trust with their biggest decisions.

This elective cuts through the IRS code into plain language: key terms and the history behind 1031s, which sales qualify and which don't, the mechanics of the exchange process (the Qualified Intermediary, the 45-day identification window, the 180-day closing deadline, and what happens if you miss them), additional strategies like taxable boot, partial exchanges, reverse exchanges, and improvement exchanges, and the tax math itself: calculating deferred gain, allowable selling expenses, and how a 1031 fits into estate planning through the step-up in basis.

Learning Objectives

• Define a 1031 exchange and identify the benefits it offers investor clients
• Distinguish qualifying from non-qualifying sales and property types
• Explain the role of the Qualified Intermediary and the 45-day identification and 180-day closing deadlines
• Identify additional exchange strategies, including taxable boot, partial exchanges, reverse exchanges, and improvement exchanges
• Calculate deferred gain and explain the tax and estate-planning benefits of a 1031 exchange, including the step-up in basis