When you sell property you may be required to pay Capital Gain tax, but Section 1031 of the Internal Revenue Code lets you defer the tax. This in not a "loop-hole", but an actual IRS code. This is a legitimate process for anyone who meets the requirements.
A 1031 Exchange (aka: Starker exchange, tax-free exchange, like-kind exchange, delayed exchange, etc.) is a specific transaction that joins the sale of an Old Property and the purchase of a New Property for the purpose of deferring Capital Gain taxes.
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