How 1031 Works
Section 1031 of the IRS code lets you exchange one investment property for another 'like-kind' property without triggering capital gains tax. The deferred gain transfers to the new property's basis.
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The 45/180 Rule
You have 45 days from closing the sale to identify replacement properties (in writing, to your qualified intermediary), and 180 days total to close on one of them.
Mistakes to Avoid
Touching the proceeds (must use a QI), missing the 45-day window, identifying too many properties under wrong rules, and trading down in value (creates 'boot' that's taxable).