Understanding Real Estate

Tax-Deferred Exchanges

Now it is time to talk about IRC Section 1034. This law is in regards to your "personal" residence. The home you live in will not qualify for an exchange because you cannot mix IRC Sections 1031 with 1034. In other words, you cannot sell your home and use the proceeds to buy business or investment property. Nor can you sell business or investment property and buy a primary residence that you intend to live in shortly after acquiring it. Exceptions and loopholes do exist, and will be discussed later.
But for now, remember, that all of the properties you sell and buy in an exchange must be trade, business or investment related.