The section 1031 exchange of the Internal Revenue Code clearly states that not all properties are qualified for property exchange. It is common that stocks and bonds are excluded, as well as several items listed in the code. It is clearly specified that only like-kind properties, meaning, properties of same nature, or type are possible qualifiers for this kind of trade.
It must be realized however that this type of life-kind exchange only offers tax-deferment and definitely not allowing the property owner to get tax-free. Usually, 1031 exchanges are executed when a property owner reinvests the sale proceeds onto another property. This said the profit would take time to be acquired, meaning, it would still also not be able to generate fund to pay any form of tax.
