Is The 1031 Property Exchange The Same As The 1031 Tax Exchange?

There are so many names, and nick names, and slang names that are used to refer to tax deferred exchange transactions pursuant to Section 1031 of the Internal Revenue Code that it is a wonder more taxpayers are not completely confused.  We get these confused questions all the time asking what the difference is between this exchang and that exchange.   This is just another version of the same question that was recently posted to our discussion forum. 

What's In A Nick Name?

I absolutely understand all of the client frustration and confusion surrounding the differences with the various names used for the 1031 Exchange transaction.  There have been so many names and nick names and slang names used over the years to refer to and describe 1031 Property Exchange transactions and/or the role of the Accommodator. 

The various nick names and terms for 1031 Property Exchanges have slowly developed and evolved over the years, but you can and will still hear many different variations even in today's real estate market.

1031 Property Exchange vs. 1031 Tax Exchange

We should first address where the 1031 Property Exchange comes from.  1031 Property Exchanges of real estate and/or personal property comes from Section 1031 of the Tax Code and is further detailed in Section 1.1031 of the Treasury Regulations. 

This is the reason that most people use the term 1031 Exchange.  However, the following names have been used frequently to describe 1031 Exchange as well, including 1031 Property Exchanges:

• 1031 Tax Exchange
• 1031 Property Exchange
• 1031 Tax Deferred Exchange
• Tax Deferred Exchange
• Like Kind Exchange
• Delayed Exchange
• Starker Exchange
• Deferred Exchange
• Section 1031 Exchange
• IRC Section 1031 Exchange

There are most likely other nick names that I have overlooked, but you get the general idea.  These names generally refer to the same type of transaction - a tax-deferred exchange transaction structured pursuant to Section 1031 of the Internal Revenue Code.  There are various differences in structure and procedure, but they all fall under the same code.