A 1031 exchange, named after Section 1031 of the IRS tax code, allows property investors to defer capital gains taxes by reinvesting the proceeds from a sold property into a like-kind property of equal or greater value. This powerful tax-deferral strategy is particularly beneficial for real estate investors looking to upgrade or diversify their property holdings without immediately incurring tax liabilities. In the Long Beach Island (LBI) real estate market, utilizing a 1031 exchange can be an excellent way to transition from one investment property to another, potentially maximizing your investment’s growth while deferring significant tax payments.