Yes, if it's right for you. It allows an owner of investment property to sell it and buy another of equal or greater value and defer all the federal tax implications.
The number 1031 comes from a section of the IRS code. The applicant has 45 days to identify a property and 185 days after that to close. If you are successful you can defer any federal tax implications for later on. You have to use a special company empowered to do these deals.
A 1031 exchange might work for if you're looking for investment property. If you are going to live in the property, it's not for you. You could not use it to buy a condo and move into it. You could use it to buy a condo if you were going to rent it out for at least 2 years. There is no period of time written into the law, but most people give you at least 2 years before you can move in. And the property you sell also has to be commercial property.
It may or may not be good for your state taxes, though. It doesn't work in Philadelphia. Check with your accountant. You also have to be able to meet the deadlines. Go to your accountant for the full story.
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