Typically when you sell a property you have to pay taxes on the capital gain.
A few exceptions apply to this rule, including a 1031 exchange which allows an investor to differ the capital gain if they invest in a property of a "like-kind".
It is key to work with a trust advisor in making sure that all of the boxes are checked for the tax deferral to apply, such as:
(i) making sure the replacement property has the same or greater amount of debt and is of a "like-kind";
(ii) within 45 days from the date of sale of the relinquished property you identify up to three potential replacement properties and
(iii) you may identify up to three replacement properties and acquire one, two or all three of the properties.
Interested in learning more about 1031 exchanges? Please contact us at Doug@BLGProperties.com or 415-295-6370.