If you own rental property and want to become a big-time landlord, use the Section 1031 exchange to1

sell appreciated properties, pay no federal income taxes, and reinvest all proceeds;

trade up into larger or better‑performing properties, such as moving from one‑door rentals into multifamily rentals;

avoid taxes during your lifetime; and

bequeath the property at death to your heirs, who receive a step-up in basis to fair market value.

Example. Jimmy purchased his first rental property some years ago for $100,000. He then sold it for $175,000 and bought a replacement for $200,000. He continued this pattern until he died this year with a real estate ... Log in to view full article.