---
title: "Section 1031 and like-kind exchanges, Tax Strategy for Buying & Selling Routes"
url: https://poolroutemarketplace.com/learn/tax-strategy-for-deals/section-1031-and-like-kind
description: "Section 1031 lets you defer capital gains by exchanging \"like-kind\" property. Since 2018, this is limited to real estate only, but it still touches some route d"
lang: en
---

# Section 1031 and like-kind exchanges

Lesson 6 of 8 · 7 min read

Section 1031 lets you defer capital gains by exchanging "like-kind" property. Since 2018, this is limited to real estate only, but it still touches some route deals.

**What changed.** Pre-2018: 1031 applied to many business assets including equipment and goodwill. Post-2018: only real property. So a pure route sale (no real estate) is no longer eligible.

**Where 1031 still matters.**

\- The seller's commercial property (a shop, warehouse, or chemical storage facility being sold with the business) can be 1031-exchanged into another commercial property
\- A buyer with appreciated real estate elsewhere can 1031 into a property the route operates from
\- Sale-leaseback structures can isolate real estate for separate 1031 treatment

**Mechanical requirements.** Use a Qualified Intermediary (QI). Identify replacement property within 45 days of sale. Close on replacement within 180 days. Reverse exchanges (buying replacement first) exist but are expensive and rare.

**Practical guidance.** If real estate is a meaningful component of your sale or purchase, plan the 1031 *before* the deal closes. Trying to retrofit a 1031 after the sale closes is impossible, the cash already touched your hands, breaking the rules.

This is a CPA-and-attorney structure. Don't DIY it.

## Quick check

\1. Since 2018, what does Section 1031 apply to?

\2. What breaks a 1031 retroactively?

\3. Days to identify replacement property?

\4. Days to identify replacement property in a 1031?

\5. Days to close on the replacement?

\6. Section 1031 like-kind exchanges still apply to business equipment after the 2017 tax law.

Earn 56 points

Mark this lesson complete

← Previous lesson: https://poolroutemarketplace.com/learn/tax-strategy-for-deals/state-and-local-tax
Next lesson →: https://poolroutemarketplace.com/learn/tax-strategy-for-deals/qualified-small-business-stock

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