A 1031 exchange, or like-kind exchange under Section 1031 of the Internal Revenue Code, allows a commercial real estate investor to defer paying capital gains taxes upon the sale of an investment property by reinvesting the net proceeds into another “like-kind” property. To fully defer the taxes, the investor must follow strict statutory timelines, including identifying a replacement property within 45 days of the initial sale and closing on that replacement property within 180 days, utilizing a qualified intermediary to hold the funds throughout the transaction loop.