A 1031 exchange, also called a like-kind exchange, is a tax-deferral strategy that may allow an owner to sell one qualifying investment or business property and acquire another qualifying real property without immediately recognizing gain. The gain is generally deferred, not erased, and the basis carries into the replacement property under the tax rules.

In general, the property being sold and the property being purchased must both be real property held for investment or for productive use in a trade or business. Real estate held primarily for sale does not qualify, and a primary residence does not qualify as replacement or relinquished property for a standard 1031 exchange.

Yes, potentially. A condo can qualify if it is real property held for investment or business use. That said, a condo being used mainly as a personal vacation home is a different situation than a condo being held as a true rental or investment property, so the facts matter.

Sometimes. The IRS has a safe harbor for certain dwelling units, including condos, that are rented to others but also used personally on a limited basis. Under that safe harbor, the property generally must be owned for at least 24 months, rented at fair rental for at least 14 days in each of the two 12-month periods, and personal use must not exceed the greater of 14 days or 10% of the days rented at fair rental during each 12-month period.

A reverse 1031 exchange is when the replacement property is acquired before the old property is sold. The IRS has a safe harbor for this structure through an exchange accommodation titleholder, often called an EAT. This can be useful when the right replacement property becomes available before the relinquished property has closed.

For a standard deferred exchange, the replacement property generally must be identified within 45 days after the relinquished property is transferred, and the replacement property generally must be received within 180 days after that transfer, or by the due date of the tax return including extensions, whichever is earlier. These deadlines are strict.

In most deferred exchanges, yes. IRS guidance explains that using a qualified intermediary is one of the recognized safe-harbor methods to avoid actual or constructive receipt of the sale proceeds. If the seller takes control of the funds, the exchange can fail.

Generally, no. A core part of the exchange rules is avoiding actual or constructive receipt of the funds. That is one reason qualified intermediaries are commonly used in deferred exchanges.

Usually yes. For Section 1031 purposes, real property can often be exchanged for other like-kind real property even if the properties differ in type, grade, or quality. For example, investment land, a rental condo, and certain other real estate interests may still be considered like-kind real property.

Possibly, but this is where planning matters. A primary residence itself does not qualify for a standard 1031 exchange, and if exchanged property is later converted to personal use, special tax rules may apply. This is the kind of decision that should be mapped out in advance with a CPA or tax advisor.

Yes. A 1031 exchange needs to be structured before closing, not after the sale is complete. The timing rules, property use rules, and title-flow requirements are too important to leave until the last minute.