Many real estate buyers take advantage of the 1031 exchange, a real estate investment technique that enables sellers of income property to defer paying capital gains taxes by acquiring a new investment property with the proceeds of a sale. According to the 1984 Congressional Tax Reform Act, owners can sell an income property and defer capital gains tax by identifying an exchange investment property within 45 days, and reinvesting the profits within 180 days. This keeps investors’ capital working for them while deferring the taxes normally due on the profits from a sale. By 1986, an increase in capital gains taxes had reignited interest in 1031 exchanges. In 2002, the IRS issued new guidelines on how a group of buyers can pool their equity and acquire larger properties, and each still satisfy their individual 1031 exchange requirements and defer capital gains taxes. The IRS has many stringent requirements to ensure a 1031 exchange is conducted properly. But perhaps most important is the investor’s choice of a suitable replacement property, be it an apartment complex, a retail center, an office building, or even an oil or gas producing property interest. The underlying real estate is generally what matters most.