Section 1031 Exchange

A 1031 exchange (named for IRS Section 1031) lets real estate investors swap one investment or business-use property for another without immediately paying capital gains tax. The exchange defers — not eliminates — the tax until the eventual cash sale of the replacement property.

Strict rules apply: the replacement property must be identified within 45 days and closed within 180 days, and the exchange must go through a qualified intermediary. Note: post-2017, 1031 treatment applies only to real property — it no longer applies to crypto or other personal property.

Why it matters for Milo customers

1031 exchanges work alongside Milo crypto-backed mortgages: sell a rental, defer capital gains, and use a Milo crypto mortgage to qualify for the replacement property without converting crypto to cash for the down payment.

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