There can be tremendous benefits to IRC Section 1031 exchanges! Conversely, not exchanging can have devastating effects. Capital gains taxes can often be deferred on both federal and state levels, allowing investors to save thousands of dollars. Upon completion of a valid 1031 exchange, capital gains will be deferred until the taxpayer chooses to recognize them. Essentially, this is an interest-free, long-term loan from the IRS. Further, the property’s heirs may inherit the property at a stepped-up cost basis – eliminating the entire tax burden. 1031 Exchange Place does not provide tax advice in addition to explaining the tax implications of exchanges. To understand their specific tax responsibilities, exchangers should always consult their tax advisors.