# Is the 1031 Exchange Going Away? What the Law Says in 2026

> Is the 1031 exchange going away? What the 2017 and 2025 tax laws changed, what Treasury has proposed, and how to plan around 1031 exchange changes.

Source: https://baker1031.com/learn/is-the-1031-exchange-going-away


By Jerry Baker, Founder, Baker 1031 Investments. Updated October 28, 2026. Topic: 1031 Exchanges. Draft for review; not yet approved by Aurora Securities.

## The short answer

The 1031 exchange, the tax rule that lets investors defer tax when they trade investment real estate for other investment real estate, is still the law as of October 2026. Congress last changed Section 1031 in 2017, when it limited the rule to real property, and the 2025 One Big Beautiful Bill Act left it unchanged.

## Key takeaways

- Section 1031 of the Internal Revenue Code is current law. You can still defer tax on the sale of investment or business real estate if you buy like-kind real estate and follow the rules.
- The last change came in the 2017 tax law, commonly called the Tax Cuts and Jobs Act. It limited exchanges to real property for exchanges completed after December 31, 2017.
- The 2025 tax law, commonly called the One Big Beautiful Bill Act, did not amend Section 1031. The Code section's amendment history still ends with the 2017 law.
- Treasury's yearly "Green Book" of tax proposals included a like-kind exchange proposal in each edition from fiscal years 2022 through 2025. None of those proposals became law.
- A proposal is not a law. Only a bill passed by Congress and signed by the President changes the tax code, and each change comes with its own effective date.
- This guide describes enacted law and official proposals. It doesn't predict what Congress will do, and it isn't tax or legal advice.

## Why do people ask whether the 1031 exchange is going away?

A 1031 exchange is a tax rule named for Section 1031 of the Internal Revenue Code. When you sell investment real estate at a profit, you normally owe tax on that profit. A 1031 exchange lets you put that tax off if you reinvest in other investment or business real estate. The tax is deferred, not erased. My guide to the [1031 exchange rules](/learn/1031-exchange-rules) explains how the deadlines, the qualified intermediary and the debt rules work.

People ask whether it's going away for a simple reason. Proposals to limit it have appeared in official budget documents from more than one administration. Each time a new proposal is published, the question comes back.

It's a fair question to ask. If you own property with a large gain, the answer affects when you sell, how you plan your estate and how long you're willing to hold. But the answer has to start with what the law actually says, not with headlines.

What's at stake is timing. In a taxable sale, you pay tax on your gain in the year you sell. In an exchange, the gain carries into the new property through a lower basis, and you can keep deferring it through later exchanges. Any limit on that deferral would change how much of your equity stays invested after a sale. That's why owners of long-held property may follow this topic closely.

So this guide separates three things that often get blurred.

1. **Enacted law.** What Congress has passed and the President has signed. This is what governs your exchange.
2. **Official proposals.** What an administration has formally asked Congress to do. These are published, but they aren't law.
3. **Commentary.** What people expect or fear might happen. I leave this out on purpose.

## What does the law say about 1031 exchanges today?

The core of [Section 1031(a)(1)](https://www.law.cornell.edu/uscode/text/26/1031) is one sentence. It says "No gain or loss shall be recognized on the exchange of real property held for productive use" in a business or for investment, "if such real property is exchanged solely for real property of like kind" that will also be held for business or investment.

A few terms in plain English:

- **Gain** is your profit for tax purposes: roughly the sale price, minus selling costs, minus your adjusted basis.
- **Basis** is your tax cost in a property. It starts as what you paid and goes down as you take depreciation.
- **Recognized** gain is gain you report and pay tax on now.
- **Like-kind** real property means real estate of the same nature or character. For real estate, that's broad. Land, apartments, warehouses and offices can generally be exchanged for one another. My guide to [like-kind property](/learn/like-kind-property) covers what qualifies and what doesn't.

The statute also sets the two deadlines that define every delayed exchange. You must identify replacement property in writing within 45 days after you transfer the property you sell. You must receive the replacement property within 180 days or your tax return due date (with extensions) for the year of the sale, whichever comes first.

And it sets the basis rule. Under [Section 1031(d)](https://www.law.cornell.edu/uscode/text/26/1031), your basis in the new property is generally "the same as that of the property exchanged," adjusted for money received and gain recognized. That's how the deferred gain travels with you.

All of this is in force as of October 2026. Nothing in the 2025 tax law changed it.

## How has Section 1031 changed over time?

The rule is old, and it has been changed many times. The source credits for the section list the original 1954 enactment and thirteen later amending laws. Here are the changes that matter most to real estate investors.

### 1954: the modern Internal Revenue Code

Section 1031 as it exists today was enacted in the Internal Revenue Code of 1954. The source credit for the section reads "Aug. 16, 1954, ch. 736, 68A Stat. 302." At that time, the rule covered exchanges of many kinds of business and investment property, not just real estate.

### 1984: the exchange deadlines

A 1984 law, Pub. L. 98-369, added the timing rules. The statutory notes describe the new paragraph as a "Requirement that property be identified within 45 days and that exchange be completed within 180 days." Before then, the statute didn't contain those deadlines. Today the completion deadline reads as 180 days or your tax return due date (with extensions) for the year of the sale, whichever comes first.

This is the change that made the modern delayed exchange what it is. Every exchange since has run on those two clocks.

### 1989: related parties and foreign property

A 1989 law, Pub. L. 101-239, added subsections (f) through (h). Those include the special rules for exchanges with related persons, such as close family members and companies you control. They also include the rule on foreign property. Today, [Section 1031(h)](https://www.law.cornell.edu/uscode/text/26/1031) says real property in the United States and real property outside it aren't like-kind.

### The regulations and IRS guidance

Treasury regulations fill in how exchanges work in practice. The regulation at [26 CFR §1.1031(k)-1](https://www.law.cornell.edu/cfr/text/26/1.1031(k)-1) explains how identification works and how a qualified intermediary can hold your money. A qualified intermediary, or QI, is the company that holds your sale proceeds so you never touch them.

The IRS has also published guidance that shaped the market.

- **[Rev. Proc. 2002-22](https://www.irs.gov/pub/irs-drop/rp-02-22.pdf)** set out the conditions under which the IRS would consider a ruling request on an undivided fractional interest in rental real property. Those are often called tenant-in-common, or TIC, interests.
- **[Rev. Rul. 2004-86](https://www.irs.gov/pub/irs-drop/rr-04-86.pdf)** said "A taxpayer may exchange real property for an interest in the Delaware statutory trust" described in the ruling, if the other 1031 rules are met. A Delaware statutory trust, or DST, is a trust that owns real estate and sells interests in it to investors.
- **[Rev. Proc. 2008-16](https://www.irs.gov/pub/irs-drop/rp-08-16.pdf)** "provides a safe harbor" for when a dwelling unit, such as a vacation home, counts as held for investment.

None of these are statutes. They are the IRS's published positions under the statute. They matter because a change to Section 1031 could affect how they apply.

### 2017: real property only

The most recent change came in Pub. L. 115-97, signed December 22, 2017, and commonly called the Tax Cuts and Jobs Act. It's the subject of the next section.

### A timeline of the key changes

| Year | Source | What happened |
|---|---|---|
| 1954 | Internal Revenue Code of 1954 | Section 1031 enacted in the modern Code |
| 1984 | Pub. L. 98-369 | Identification and completion deadlines added |
| 1989 | Pub. L. 101-239 | Subsections (f) to (h) added, including related-party and foreign property rules |
| 2002 | Rev. Proc. 2002-22 | IRS sets conditions for ruling requests on fractional (TIC) interests |
| 2004 | Rev. Rul. 2004-86 | IRS says an interest in a qualifying DST can be exchanged under Section 1031 |
| 2008 | Rev. Proc. 2008-16 | Safe harbor for dwelling units such as vacation homes |
| 2014–2016 | Treasury Green Books, FY2015 through FY2017 | Proposals to modify like-kind exchange rules; not enacted |
| 2017 | Pub. L. 115-97 | Exchanges limited to real property, for exchanges completed after Dec. 31, 2017 |
| 2021–2024 | Treasury Green Books, FY2022 through FY2025 | Proposals to repeal deferral of gain from like-kind exchanges above a limit; not enacted |
| 2025 | Pub. L. 119-21 | No amendment to Section 1031 |

## What did the 2017 Tax Cuts and Jobs Act change?

The 2017 law made one big change to Section 1031. It took everything except real estate out of the rule.

### Personal property was removed

Before 2018, businesses used Section 1031 to swap many kinds of property, such as equipment and vehicles. The law substituted "real property" for "property" in the key subsection. The IRS explained the effect in [news release IR-2018-227](https://www.irs.gov/newsroom/like-kind-exchanges-now-limited-to-real-property), dated November 19, 2018. It said "like-kind exchange tax treatment is now generally limited to exchanges of real property." The release lists property that no longer qualifies, "such as machinery, equipment, vehicles, artwork, collectibles, patents, and other intellectual property."

### Real estate exchanges were kept

For real estate investors, the core rule survived. The deferral, the deadlines, the qualified intermediary safe harbor and the basis rules all stayed in place. The IRS release notes that real property "includes land and generally anything built on or attached to it."

### The effective date and the transition rule

The change applies "to exchanges completed after December 31, 2017." The law also included a transition rule. The change didn't apply to an exchange if the property you gave up was "disposed of on or before December 31, 2017," or if the property you received was "received on or before December 31, 2017."

That transition rule is a useful example. When Congress changed Section 1031, it protected exchanges that were already partly done. That's how this law handled the change. A future law could handle it differently, so any change has to be read for its own effective date.

## Did the One Big Beautiful Bill Act change 1031 exchanges?

No. The 2025 tax law, Public Law 119-21, was approved on July 4, 2025. Its official title is "An act to provide for reconciliation pursuant to title II of H. Con. Res. 14," and it's commonly called the One Big Beautiful Bill Act. The [public law record on GovInfo](https://www.govinfo.gov/app/details/PLAW-119publ21) lists it as H.R. 1.

Here's how you can see that Section 1031 wasn't changed. Each section of the Code lists the laws that amended it. For [Section 1031](https://www.law.cornell.edu/uscode/text/26/1031), the last entry is Pub. L. 115-97, the 2017 law. There is no entry for Pub. L. 119-21.

You can also check that the 2025 law does appear where it changed other sections. For example, the estate tax section, [Section 2010](https://www.law.cornell.edu/uscode/text/26/2010), now says "the basic exclusion amount is $15,000,000," and its source credit cites Pub. L. 119-21. So the 2025 law reached the estate tax rules but left Section 1031 as it was.

### What the 2025 law did change for real estate families

The estate tax change is the one real estate owners are most likely to notice. Section 2010 sets the basic exclusion amount, which is the value of an estate that can pass without federal estate tax. The 2025 law raised it to $15,000,000, for estates of people who die and gifts made after 2025. That figure is in the statute now, though Congress can change any law later.

That change doesn't affect how a 1031 exchange works. It affects how much an estate can pass on before estate tax applies. The two questions often come up in the same planning meeting, so it helps to keep them apart. Your estate attorney handles the estate tax side. Your CPA and QI handle the exchange.

### What about the basis rules at death?

Many real estate families think about Section 1031 and the basis rules at death together. Under [Section 1014](https://www.law.cornell.edu/uscode/text/26/1014), property you leave at death generally gets a basis equal to "the fair market value of the property at the date of the decedent's death." That can wipe out the deferred gain from a lifetime of exchanges for your heirs.

The source credit for Section 1014 also shows no amendment by the 2025 law. Its most recent amendment listed is from 2015. My guide to the [step-up in basis](/learn/step-up-in-basis) covers how the two rules work together in estate planning.

## What 1031 exchange changes have been proposed?

The main official source for proposed changes is Treasury's "Green Book." Its formal name is the General Explanations of the Administration's revenue proposals. Treasury publishes it alongside the President's budget, and it explains each tax change the administration is asking Congress to make. Past editions are listed on Treasury's [revenue proposals page](https://home.treasury.gov/policy-issues/tax-policy/revenue-proposals).

A Green Book proposal is a request to Congress. It has no legal effect by itself.

### The FY2015 through FY2017 Green Books

The [FY2015 Green Book](https://home.treasury.gov/system/files/131/General-Explanations-FY2015.pdf), dated March 2014, lists a proposal titled "Modify Like-Kind Exchange Rules for Real Property." The [FY2016 Green Book](https://home.treasury.gov/system/files/131/General-Explanations-FY2016.pdf), dated February 2015, lists a proposal titled "Modify Like-Kind Exchange Rules for Real Property and Collectibles." The [FY2017 Green Book](https://home.treasury.gov/system/files/131/General-Explanations-FY2017.pdf), dated February 2016, lists a proposal titled "Modify Like-Kind Exchange Rules."

None of these proposals was enacted. The next change to Section 1031 was the 2017 law, which took a different approach. It ended exchanges of personal property and kept real estate exchanges.

### The 2021 American Families Plan

In April 2021, the White House published a [fact sheet on the American Families Plan](https://bidenwhitehouse.archives.gov/briefing-room/statements-releases/2021/04/28/fact-sheet-the-american-families-plan/). It said the President would "end the special real estate tax break" that lets real estate investors defer taxation when they exchange property, "for gains greater than $500,000."

### The FY2022 through FY2025 Green Books

The proposal then appeared in four Green Books in a row.

| Green Book | Released | Proposal title as listed |
|---|---|---|
| [FY2022](https://home.treasury.gov/system/files/131/General-Explanations-FY2022.pdf) | May 2021 | Repeal Deferral of Gain From Like-Kind Exchanges |
| [FY2023](https://home.treasury.gov/system/files/131/General-Explanations-FY2023.pdf) | March 2022 | Repeal Deferral of Gain from Like-Kind Exchanges |
| [FY2024](https://home.treasury.gov/system/files/131/General-Explanations-FY2024.pdf) | March 2023 | Repeal deferral of gain from like-kind exchanges |
| [FY2025](https://home.treasury.gov/system/files/131/General-Explanations-FY2025.pdf) | March 2024 | Repeal deferral of gain from like-kind exchanges |

The FY2023 Green Book's overview describes the like-kind exchange real estate preference as one "which would be eliminated for those with the highest incomes." In other words, the proposal aimed at larger gains, not at every exchange.

The details, such as dollar thresholds and effective dates, are in each Green Book's full write-up. If a specific number matters to your planning, read that year's document or ask your CPA to.

### Where things stand as of October 2026

None of these proposals became law. The amendment history of Section 1031 shows no change after 2017.

As of October 2026, the most recent Green Book listed on Treasury's revenue proposals page is the FY2025 edition, released March 2024. No later edition is listed there.

This guide covers enacted law and Treasury's published proposals. It doesn't track every bill a member of Congress introduces. Many bills are introduced; only enacted ones change the law. If you hear about a specific bill, the question to ask is the same one this guide asks: has it been enacted?

## Current law vs. the past proposals: how do they compare?

Here's how current law compares with the proposals described above. The proposal column shows only what the official documents cited here state.

| Question | Current law (as of October 2026) | FY2022–FY2025 Green Book proposal |
|---|---|---|
| Status | Enacted and in force | Proposed; not enacted |
| What can be exchanged | Real property held for business or investment, for like-kind real property | Same starting point, with deferral limited |
| How much gain can be deferred | No dollar limit if all rules are met | The 2021 fact sheet described ending the break "for gains greater than $500,000" |
| Deadlines | 45 days to identify; 180 days or your tax return due date (with extensions) for the year of the sale, whichever comes first | No change described in the sources cited here |
| Who it aimed at | Any taxpayer who meets the rules | Described as aimed at "those with the highest incomes" |
| Effective date | Current rules apply to exchanges completed after December 31, 2017 | Would have applied only from a date set in a law that was never passed |

## Which parts of an exchange depend on Section 1031?

When people ask whether the 1031 exchange is going away, they often mean the whole package of rules around an exchange. Those rules come from different places. A change to one doesn't automatically change the others.

| Part of your plan | Where the rule comes from | Changed by the 2025 tax law? |
|---|---|---|
| Deferring gain on an exchange of real property | Section 1031 | No |
| The 45-day and completion deadlines | Section 1031(a)(3) | No |
| How a QI can hold your money | Treasury regulation §1.1031(k)-1 | No change to Section 1031 |
| Whether a DST interest can qualify | Rev. Rul. 2004-86, applying Section 1031 | No change to Section 1031 |
| Basis of property at death | Section 1014 | No |
| Contributing property to a partnership (the 721 path) | Section 721 | No |
| Estate tax exclusion amount | Section 2010 | Yes, now $15,000,000 |
| State tax on your gain | Your state's law | Varies by state |

The table is a reminder to read news carefully. A headline about "real estate tax changes" might be about the estate tax, depreciation or a state rule, not Section 1031 at all. Ask which section of the Code a change touches.

## How can you check whether Section 1031 has changed?

You don't have to rely on anyone's summary, including mine. Four official places will tell you whether the rules have moved.

### The statute and its source credits

The text of [Section 1031](https://www.law.cornell.edu/uscode/text/26/1031) ends with a list of every law that amended it. If a new law changes the section, its public law number appears there. As of October 2026, the last entry is Pub. L. 115-97 from 2017.

### The Form 8824 page and instructions

The IRS updates the form used to report exchanges each year. The [About Form 8824](https://www.irs.gov/forms-pubs/about-form-8824) page has a "Recent Developments" area. When it was last updated in August 2026, it read "None at this time." The [Form 8824 instructions](https://www.irs.gov/instructions/i8824) for each year also describe any rule changes that affect the form.

### Treasury's revenue proposals page

Treasury's [revenue proposals page](https://home.treasury.gov/policy-issues/tax-policy/revenue-proposals) lists each Green Book. If a new edition includes a like-kind exchange proposal, that's where you'd find the official text. Remember that a proposal is only a proposal.

### The public law record

Enacted laws are published with a public law number on [GovInfo](https://www.govinfo.gov/app/details/PLAW-119publ21), the federal government's official publishing site. If someone tells you a law changed Section 1031, ask for the public law number and the section of that law. Then check that the change appears in the Code.

## How does a proposal become a change to the 1031 exchange?

It helps to know the path, because headlines sometimes describe an early step as if it were the last one.

1. **An administration proposes.** Treasury publishes the proposal in the Green Book with the budget.
2. **A bill is written and introduced.** A member of Congress puts the change into legislative text.
3. **Committees act.** Tax bills usually start in the House Ways and Means Committee, and the Senate Finance Committee also acts.
4. **Both chambers pass the same text.** The House and Senate must pass identical language.
5. **The President signs.** The bill becomes a public law with a number, such as Pub. L. 115-97.
6. **The Code is updated.** The change appears in the text of Section 1031, with an effective date.
7. **Treasury and the IRS issue guidance.** Regulations, forms and instructions are updated over time.

Only steps 5 and 6 change what you can do. A proposal at step 1 can be informative. It isn't a rule you have to follow.

## Worked example: how a cap on deferral would work

This is a hypothetical illustration with round numbers. It doesn't describe any client, property or offering. It doesn't describe any enacted rule, and it isn't a prediction. It shows only the mechanics of a dollar cap, using the $500,000 figure from the 2021 fact sheet as the example amount.

### The starting point

Say you bought a building years ago. Your adjusted basis is $600,000. You sell it for $2,000,000. To keep the math simple, ignore closing costs and debt.

Your gain is $2,000,000 − $600,000 = **$1,400,000**.

You buy a $2,000,000 replacement property and reinvest all the money, meeting every 1031 rule.

### Under current law

All $1,400,000 of gain is deferred. You report the exchange on Form 8824, the IRS form for like-kind exchanges, but you recognize no gain now.

Your basis in the new building is your old $600,000. Put another way, $2,000,000 of value minus $1,400,000 of deferred gain equals $600,000.

### Under a hypothetical $500,000 cap

Now imagine a rule that allows deferral of only the first $500,000 of gain. The other $900,000 would be recognized and taxed in the year of the sale. The real design would depend on the text of a law.

Your basis in the new building would be $2,000,000 − $500,000 = **$1,500,000**. That higher basis reflects the gain you already paid tax on.

### A smaller exchange

Now say a different investor has a $300,000 gain on a smaller sale. Under current law, all $300,000 is deferred. Under the same hypothetical cap, all $300,000 is still deferred, because it's under $500,000.

### The two cases side by side

| Hypothetical | Gain | Deferred under current law | Deferred under a $500,000 cap | Recognized now under the cap |
|---|---|---|---|---|
| Larger sale | $1,400,000 | $1,400,000 | $500,000 | $900,000 |
| Smaller sale | $300,000 | $300,000 | $300,000 | $0 |

The example shows why the question "is the 1031 exchange going away?" doesn't have a yes-or-no answer even in the proposals. The proposals described in this guide were limits on large gains, not a repeal for every exchange. How any limit would work in practice would depend on the text of a law, if one were ever passed.

## How do you plan an exchange when the law could change, step by step?

You can't control what Congress does. You can control how well your plan holds up under the law as it stands. Here's a practical sequence.

### Step 1: Start from current law

Plan under the rules that are in force today. As of October 2026, Section 1031 allows deferral for exchanges of like-kind real property that meet the rules, with no dollar limit.

### Step 2: Check the source of any news

When you read that the 1031 exchange is changing, find out what kind of document it's based on. Is it an enacted public law, a Green Book proposal, a bill that was introduced or someone's opinion? Only the first changes the rules.

### Step 3: Read the effective date

If a change is enacted, its effective date tells you which exchanges it covers. The 2017 law applied to exchanges completed after December 31, 2017, with a transition rule for exchanges already partly done. Don't assume a future change would follow the same pattern. Read the text.

### Step 4: Map your own timeline with your CPA

Ask your CPA to estimate your gain, your depreciation and your debt. Then look at when you might sell, and whether you're likely to exchange again later. A plan that only works if the law never changes is fragile.

### Step 5: Keep your exchange file complete

Good records protect you under any rules. Keep the exchange agreement, the identification notice, both settlement statements and Form 8824. My guide to [1031 exchange documents](/learn/1031-exchange-documents-checklist) lists what to keep and for how long.

### Step 6: Don't rush into a poor property

Fear of a change can push people to buy in a hurry. A rushed purchase can cost more than the tax you were trying to defer. A deal should stand on its own.

### Step 7: Know your other options

An exchange isn't the only path. Paying the tax, an installment sale or other structures may fit some situations. My guide to [1031 exchange alternatives](/learn/1031-exchange-alternatives) compares them.

### Step 8: Revisit the plan each year

Check for enacted changes once a year, or when you're about to sell. A short call with your CPA before you list a property is usually enough.

## Mistakes to avoid when reading 1031 exchange news

1. **Treating a proposal as law.** Green Book proposals have no legal effect. Only enacted laws change the Code.
2. **Assuming "going away" means "repealed for everyone."** The recent official proposals described limits on larger gains, not an end to every exchange.
3. **Ignoring effective dates.** Even an enacted change applies only from its effective date, and it may include transition rules.
4. **Rushing a sale or a purchase.** A deal made to beat a rumored deadline can cost more than it saves.
5. **Reading old rules as current.** Before 2018, personal property could be exchanged. Now only real property qualifies.
6. **Confusing state and federal rules.** States have their own tax rules and forms, and some track deferred gain after you exchange into property in another state. Ask your CPA about your state.
7. **Assuming a 2025 change that didn't happen.** The 2025 tax law didn't amend Section 1031. If someone says otherwise, ask for the section of the public law.
8. **Building a plan that only works under today's law.** Laws can change. Plan for the rules in force now, and keep options open.
9. **Skipping professional review.** A CPA and an attorney can read a new law against your facts. A headline can't.

## Where do DST interests and UPREIT paths fit in?

Two common replacement choices depend on rules that sit outside Section 1031's text. It's worth knowing which rule each one rests on.

### DST interests

A DST interest can qualify as replacement property because of Rev. Rul. 2004-86, which applies Section 1031 to qualifying trusts. A DST exchange relies on Section 1031 just like any other exchange. The ruling doesn't give DSTs any separate tax break. My [DST guide](/learn/dst-guide) explains how they work.

DST interests are securities. Most are offered only to accredited investors. They are illiquid, you have little control, distributions are not guaranteed and you can lose your entire investment.

### UPREIT paths and Section 721

An UPREIT is a real estate investment trust, or REIT, that owns its buildings through an operating partnership. Some DSTs give that partnership an option to acquire the DST's property later in exchange for operating partnership units, which are ownership units in that partnership. That step uses [Section 721](https://www.law.cornell.edu/uscode/text/26/721), a separate section about contributing property to a partnership.

A key point for long-term planning: operating partnership units aren't real property, so they can't be exchanged under Section 1031. Once you take the 721 path, your chain of 1031 exchanges ends, under today's law. My [721 exchange guide](/learn/721-exchange-guide) covers the trade-offs.

## How I approach tax-law questions

I'm Jerry Baker, founder of Baker 1031 Investments, and you can read [my background](/about) on the about page. This guide sticks to the statute and the official documents, and your CPA and attorney can apply them to your own facts.

If a DST fits your plan under current law, you can see [the offerings I currently have available](/invest). Securities are offered through Aurora Securities, Inc., member FINRA/SIPC. Baker 1031 Investments is independent of Aurora.

## What my data shows

[My offering records](/data/dst-offerings) as of October 2026 cover 76 DST offerings from 38 sponsors. They don't measure policy. But two numbers bear on how a change in tax law could touch a DST investment you make today.

### Projected holds run for years

In my offering records as of October 2026, a 10-year projected hold is the most common, at 31 offerings. Others project 5 to 10 years or 7 years, and a few are 2-year programs.

With a long hold, the property would be sold under the tax rules in force at that time, not the rules in force when you bought in. That's a reason to plan for flexibility, not a reason to predict a change.

### Many offerings include a 721 path

In my offering records as of October 2026, 44 offerings (58%) have an optional 721 exit, 13 (17%) have a mandatory 721 exit, 17 (22%) have none, and 2 are unclear.

| 721 (UPREIT) exit | Offerings | Share |
|---|---|---|
| Optional | 44 | 58% |
| Mandatory | 13 | 17% |
| None | 17 | 22% |
| Unclear | 2 | — |

This matters for the "going away" question in a practical way. Under current law, a 721 exit ends your ability to keep exchanging under Section 1031. If keeping future exchanges open matters to you, check whether an offering's 721 exit is optional, mandatory or absent, and read that part of the PPM with your CPA and attorney.

## Frequently asked questions

### Is the 1031 exchange going away in 2026?

Section 1031 is current law as of October 2026. The 2025 tax law didn't change it, and no later law has. This guide describes the law as it stands and doesn't predict future changes.

### Did the One Big Beautiful Bill Act change 1031 exchanges?

No. Public Law 119-21, approved July 4, 2025, did not amend Section 1031. The section's amendment history still ends with the 2017 law.

### What did the 2017 tax law change about 1031 exchanges?

It limited 1031 exchanges to real property, for exchanges completed after December 31, 2017. Equipment, vehicles, artwork and other personal property no longer qualify. Real estate exchanges kept the same core rules.

### Has anyone proposed limiting 1031 exchanges?

Yes. Treasury's Green Books for fiscal years 2022 through 2025 each listed a proposal to repeal deferral of gain from like-kind exchanges, and in April 2021 a White House fact sheet described ending the break for gains greater than $500,000. None of those proposals became law.

### Is there a cap on how much gain I can defer in a 1031 exchange?

Not under current law. If you meet all the rules, there's no dollar limit on deferred gain. A 2021 White House fact sheet described limiting the break to gains of $500,000, but no limit was ever enacted.

### What is the Treasury Green Book?

It's Treasury's explanation of the tax proposals in the President's budget. Its formal name is the General Explanations of the Administration's revenue proposals. A Green Book proposal is a request to Congress, not a law.

### If the law changes, will my exchange in progress be protected?

That depends on the effective date and any transition rule in the new law. The 2017 law didn't apply to exchanges where the property was given up or received on or before December 31, 2017. A different law could use different rules, so you'd need to read its text with your CPA.

### Can I still do a 1031 exchange into a DST?

Under current law, a DST interest can qualify as replacement property if the trust meets the conditions in Rev. Rul. 2004-86 and the other 1031 rules are met. DSTs are securities with real risks, including illiquidity and possible loss of your entire investment. Most are offered only to accredited investors.

### Where can I check whether Section 1031 has changed?

Look at the list of amending laws at the end of Section 1031 in the U.S. Code, and at the IRS's About Form 8824 page. Treasury's revenue proposals page shows any new proposals. Your CPA can confirm whether a change applies to you.

### Should I sell now in case the 1031 exchange goes away?

That's a personal decision that turns on your property, your gain and your goals, not on headlines. Plan under current law and talk with your CPA and attorney before acting. Rushing a sale or a purchase can cost more than it saves.

### Did the 2025 tax law change the estate tax for real estate owners?

Yes. Public Law 119-21 set the basic exclusion amount in Section 2010 at $15,000,000, for estates of people who die and gifts made after 2025. It did not amend Section 1031 or the Section 1014 basis rule for inherited property, and your estate attorney can tell you how that fits your plan.

## Before you act

This guide is for education only. It isn't tax, legal or investment advice. Please confirm every decision with your CPA, attorney and qualified intermediary.

## Sources

- [26 U.S.C. § 1031, Exchange of real property held for productive use or investment (Cornell LII)](https://www.law.cornell.edu/uscode/text/26/1031)
- [26 CFR § 1.1031(k)-1, Treatment of deferred exchanges (Cornell LII)](https://www.law.cornell.edu/cfr/text/26/1.1031(k)-1)
- [26 U.S.C. § 1014, Basis of property acquired from a decedent (Cornell LII)](https://www.law.cornell.edu/uscode/text/26/1014)
- [26 U.S.C. § 2010, Unified credit against estate tax (Cornell LII)](https://www.law.cornell.edu/uscode/text/26/2010)
- [26 U.S.C. § 721, Nonrecognition of gain or loss on contribution (Cornell LII)](https://www.law.cornell.edu/uscode/text/26/721)
- [GovInfo, Public Law 119-21](https://www.govinfo.gov/app/details/PLAW-119publ21)
- [GovInfo, Public Law 115-97](https://www.govinfo.gov/app/details/PLAW-115publ97)
- [IRS, About Form 8824, Like-Kind Exchanges](https://www.irs.gov/forms-pubs/about-form-8824)
- [IRS, Instructions for Form 8824 (2025)](https://www.irs.gov/instructions/i8824)
- [IRS, IR-2018-227, Like-kind exchanges now limited to real property](https://www.irs.gov/newsroom/like-kind-exchanges-now-limited-to-real-property)
- [IRS Rev. Proc. 2002-22](https://www.irs.gov/pub/irs-drop/rp-02-22.pdf)
- [IRS Revenue Ruling 2004-86](https://www.irs.gov/pub/irs-drop/rr-04-86.pdf)
- [IRS Rev. Proc. 2008-16](https://www.irs.gov/pub/irs-drop/rp-08-16.pdf)
- [U.S. Treasury, Revenue Proposals (Green Books)](https://home.treasury.gov/policy-issues/tax-policy/revenue-proposals)
- [U.S. Treasury, General Explanations of the Administration's FY2015 Revenue Proposals](https://home.treasury.gov/system/files/131/General-Explanations-FY2015.pdf)
- [U.S. Treasury, General Explanations of the Administration's FY2016 Revenue Proposals](https://home.treasury.gov/system/files/131/General-Explanations-FY2016.pdf)
- [U.S. Treasury, General Explanations of the Administration's FY2017 Revenue Proposals](https://home.treasury.gov/system/files/131/General-Explanations-FY2017.pdf)
- [U.S. Treasury, General Explanations of the Administration's FY2022 Revenue Proposals](https://home.treasury.gov/system/files/131/General-Explanations-FY2022.pdf)
- [U.S. Treasury, General Explanations of the Administration's FY2023 Revenue Proposals](https://home.treasury.gov/system/files/131/General-Explanations-FY2023.pdf)
- [U.S. Treasury, General Explanations of the Administration's FY2024 Revenue Proposals](https://home.treasury.gov/system/files/131/General-Explanations-FY2024.pdf)
- [U.S. Treasury, General Explanations of the Administration's FY2025 Revenue Proposals](https://home.treasury.gov/system/files/131/General-Explanations-FY2025.pdf)
- [The White House (archived), Fact Sheet: The American Families Plan, April 28, 2021](https://bidenwhitehouse.archives.gov/briefing-room/statements-releases/2021/04/28/fact-sheet-the-american-families-plan/)

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Securities are offered through Aurora Securities, Inc., member FINRA/SIPC. Baker 1031 Investments, LLC is independent of Aurora Securities, Inc. and is not a registered broker-dealer or investment adviser. This content is general education, not investment, tax, or legal advice, and is not an offer to buy or sell securities. Offers are made only through the offering documents to eligible investors, generally accredited investors. DST interests are illiquid, distributions are not guaranteed, and you can lose your entire investment.

Contact: Jerry Baker, Baker 1031 Investments · hello@baker1031.com · (415) 965-0552 · https://baker1031.com/contact