In 1918 income tax law began requiring taxes to be paid on all property gains.

By 1921 Congress passed a tax law aimed at allowing farmers to directly swap horses and farm land. It became section §1031 of the Internal Revenue Code.

In 1923 Congress excluded the exchange of stocks, bonds, notes, and other securities.

The law remained essentially the same until 1979 when Starker affected a 5 year deferred exchange and won in the US Tax Court. Due to this landmark case,

In 1984 Congress put some limits on the Starker Decision and added the 45 day ID period, 180 day exchange period, and excluded partnership interests from exchanges.

In 1989 Congress defined foreign property as non-like kind to US property, started special rules for related parties, and tried to require holding periods last at least one year before and after the exchange.

In 1991, the role of a qualified intermediary (QI) also known as a facilitator or accommodator or coordinator was defined in the detailed Treasury Regulations. This is when our company 1031 Exchange Coordinators was founded.

In 1994 installment sales were allowed with §1031.

2000. Revenue Procedure 2000-37 established the 180 day safe harbor for reverse exchanges.

2002. Revenue Procedure 2002-22 allowed for real estate to be syndicated and marketed as undivided “Tenant-in-Common” (TIC) ownership that differs from partnerships.

2002. Revenue Ruling 2002-83 reinforced the IRS position that a taxpayer may not buy replacement property from related parties.

2005. Revenue Procedure 2005-14 provided for the combined use of §121 (sale of principal residence) with §1031 and for former §1031 property to be owned for a period of 5 years before the residential exclusion tax break can apply.

That is how we arrived at today where hundreds of thousands of ordinary taxpayers do exchanges each year and 90% of all properties over 10 million are bought and sold through §1031 exchanges.