https://www.siliconvalley.com/2022/01/28/agents-advise-on-housing-issues-not-tax-code-procedures/ > Q: We sold an inherited Bay Area rental property to exchange it for a small building out of state. We bought the small apartment building while visiting family. It has an owner unit for our eventual retirement and is within walking distance to the downtown. We purchased the building with cash, expecting to reimburse our retirement savings when selling the Bay Area rental house. > We understood that we could transfer the equity from the Bay Area rental house into the apartment building and defer paying taxes under the 1031 IRS tax code. No one mentioned that owning both properties in our names simultaneously might void the 1031 IRS tax code. The realty agents only promoted the reverse 1031 IRS tax code exchange concept of buying the replacement property first.