A 1031 exchange lets you defer capital gains taxes by selling one investment property and reinvesting the proceeds into another of equal or greater value. The replacement property must be identified within 45 days of the sale and closed within 180 days. Both properties must be held for investment or business use, not personal use. In San Francisco, where appreciation can be significant over time, a 1031 exchange is a powerful tool for growing a portfolio without a major tax hit at each transition. Always work with a qualified intermediary and your CPA for the execution.
