Question: What are the tax advantages in a 1031 exchange? (Starker Exchange)
Answer:
You can defer the payment of capital gains taxes associated with real estate transactions. By selling one property and buying
a higher-priced property, you can also get additional depreciation deductions, which can act to increase your after-tax income.
In addition, you can eliminate paying taxes on the recapture of depreciation you've taken on the property.