Real Estate that qualifies for a 1031 tax free exchange is property that was purchased as an investment.  Very specific rules must be followed to sell or exchange a property and avoid any capital gains tax .  I am not a CPA or tax professional, nor do I play one on TV, but I am a real estate professional that has handled many of these exchanges and want to offer what I know.  If you plan on a 1031 exchange in the future I would suggest you also talk with a tax professional about your particular tax situation.

The 1031 option has always been a very popular way of selling one ranch to buy up and defer any taxes.  While the capital gains tax rate was 15%, most people would just pay the tax because they knew it would probably never be that low again.  Now that the rate is at a minimum of 20% + depending on your income level, an additional 3.8% medicare tax can be added + whatever the Obamacare tax is taking the rate to as high as 28.5%.  The 1031 is becoming very popular again and a great way to put paying that tax down the road to a later date.