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When US real estate investors talk about how to save money, one of the ways they go about it is using what is called a 1031 exchange. This basically refers to section 1031 of the Internal Revenue Code which states that real estate property owners can finish an exchange of properties as long as those assets are similar to one another. When you exchange properties as opposed to a regular purchase of one, you can avoid not paying the capital gains tax that accumulates once that property has been sold to a buyer.
from: http://ezinearticles.com/?Investing-In-US-Real-Estate-Using-The-1031-Exchange&id=6901363
