Defer long enough and your heirs may never pay it.
Deferred gain does not follow a property forever. Under current law basis is adjusted at death — which is why some investors exchange and never sell.
Exchanges and the step-up in basis
Deferral is not forgiveness
Each exchange rolls the gain forward into the replacement property. It stays deferred for as long as you keep exchanging rather than selling.
Basis is adjusted at death
Under current law heirs take the property at its fair market value, and the gain that rode along through the chain is generally not taxed to them.
The chain has to hold up
Clean documentation on every exchange along the way is what makes the eventual position defensible years later.
Three steps, and we carry most of them
Call before you close
We confirm an exchange fits, map the deadlines against your timeline, and put the exchange agreement in place before the sale closes.
We hold the proceeds
Funds go from the closing table to us, never to you. That is what keeps the deferral intact.
You buy, we close it out
You identify and negotiate the replacement property. We handle the documentation, the funding and the reporting trail.
1031 Specialists
Investors call it swap till you drop. It only works if every exchange in the chain was done properly, which is an argument for keeping the same intermediary and the same records from the first one forward. It is also long-horizon planning, and tax law changes — your estate attorney and CPA should be in the conversation.
We are a qualified intermediary for IRC Section 1031 tax-deferred exchanges, facilitating exchanges for real estate investors in all fifty states. We handle the exchange agreement, the identification and closing deadlines, and the custody of exchange funds. Every exchange includes unlimited tax optimization consulting, audit protection and an attorney guarantee, on a simple flat fee you pay at close.
Exchanges and the step-up in basis, answered
Do I ever pay the deferred tax?
You do if you sell without exchanging. If you hold the property until death, current law adjusts the basis for your heirs.
Does the deferred gain pass to my heirs?
Under current law the basis adjustment at death means the deferred gain is generally not inherited as a tax liability.
Should I build a plan around this?
Talk to your estate attorney and CPA. This is a decades-long strategy and the rules it depends on can change.
Talk to someone before the clock starts
Reach me directly, or call the main line and ask for anyone on the exchange team.
Main line
(631) 438-1031General email
info@1031specialists.comMailing address
30262 Crown Valley Pkwy, Suite B 464Laguna Niguel, CA 92677
The information on this page is general in nature and is not tax or legal advice. 1031 Specialists is a qualified intermediary, not a law firm, accounting firm or investment adviser. Consult your own tax and legal advisors about your circumstances before entering into an exchange.