A 1031 exchange is an IRS code section that allows an investor to defer capital gains taxes from the sale of a business property or investment asset. This tax deferral technique is attractive to investors who want to reinvest their proceeds into a similar asset or business property, as it allows them to defer the payment of capital gains taxes until a later date. The rules for 1031 exchanges are strict, and the investor must meet certain criteria in order to successfully complete the exchange.

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