IRC Section 1031 tax-deferred exchanges allow real estate investors to defer capital gain taxes on the sale of real property held for productive use in a trade or business or for investment.  This tax savings provides many benefits including the obvious – 100% preservation of equity. Investors can take advantage of 1031 exchanges to meet other objectives, including A ) Leverage: exchanging from a high equity position or “free and clear” property into a much larger property with some financing in order to increase their return on investment.  B) Diversification: such as exchanging into other geographical regions or diversifying by property type such as exchanging from several residential units into a retail strip center.  C) Management Relief: for example, exchanging out of multiple relinquished properties into either a replacement property like an apartment complex with an on-site manager or a tenant-in-common ownership program. Read the full article, Sale vs. a 1031 Exchange.