How does a 1031 exchange let me defer capital gains on Miami property?

Section 1031 of the US Internal Revenue Code is the most powerful capital-gains deferral tool in the real-estate playbook. Used correctly, it turns Miami into a tax-efficient compounding machine, gains roll forward across exchanges indefinitely.

Two rigid timelines

1. 45 days, from the date of closing the sale, identify in writing up to 3 potential replacement properties (or follow the 200% rule for more).
2. 180 days, from the same closing date, close on one of the identified replacement properties.
3. Miss either deadline = the entire exchange fails = the full gain becomes taxable for that year.

What qualifies as 'like-kind'

• ANY US investment real estate qualifies, condo for single-family, raw land for office, hotel for warehouse.
• Primary residences DO NOT qualify (different tax treatment under Section 121).
• Foreign property does NOT qualify, must be US to US.
• Personal property (cars, art) was eliminated from 1031 in 2018.

The Qualified Intermediary requirement

You cannot touch the sale proceeds. A Qualified Intermediary (QI), an independent third party, holds the funds between sale and replacement-property closing. Choose a QI before you start the sale. Their fee runs $750–$1,500 per exchange.

FIRPTA + 1031, the foreign-seller wrinkle

• Standard FIRPTA: 15% of gross sale price withheld at closing.
• If the property goes into 1031: the 15% withholding STILL APPLIES unless paired with a Form 8288-B Withholding Certificate.
• File Form 8288-B 90+ days BEFORE closing to request reduced/zero withholding.
• Without the certificate: 15% sits with IRS while you try to complete 1031, common cause of failed exchanges.

“1031 is not a loophole, it's policy. Congress wants capital to move efficiently across US real estate. International investors who plan ahead get the same treatment as Americans.”