1031 Exchange
Definition
Section 1031 of the US Internal Revenue Code allows an investor to defer federal capital gains tax on the sale of investment real estate by reinvesting the proceeds into a 'like-kind' replacement property within a strict timeline: 45 days to identify replacement, 180 days to close. A qualified intermediary (QI) must hold the proceeds — the seller cannot take constructive receipt of the cash.
Worked example
An investor sells a stabilized rental for $800k with a $300k gain. Without a 1031, federal capital gains plus depreciation recapture could exceed $90k. A properly executed 1031 into a $900k replacement property defers the entire tax bill.
How DealIntel uses it
1031 eligibility is not a Kill List item but is surfaced on the Buy-and-Hold playbook as an exit-strategy consideration when the investor flags a long-hold intent.