Sell Now, Pay Taxes Later: Analyzing a 1031 Exchange for a Real Estate Investor

In December 2025, Thomas Keirlan was facing the most significant real estate investment decision of his lifetime. He had owned and managed a growing portfolio of North Texas investment properties that had appreciated in value during the past three decades, but now, at age 65, he was ready to simplify. Sitting before him was a stack of purchase agreements prepared for his signature that would liquidate his entire portfolio for just under $6 million. Without any further action on his part, these sales would trigger nearly $1.2 million in capital gains taxes. Victor Daxley, his accountant, had called a meeting to discuss his options to defer those taxes through a 1031 exchange. He liked the idea of deferring those taxes and maintaining a more passive investment in real estate, but as he had learned so many times in his life, opportunities might not always be as good as they first appear.