Ocean Abstract Co.

A tax free exchange is simply the process that allows a taxpayer to exchange an investment or business property for another investment or business property of equal or greater value, and defer all the capital gains tax. In order to successfully complete a tax free exchange, you must obtain a qualified intermediary prior to the sale of the investment property.

In an ordinary sales transaction, the property owner is taxed on any gain realized by the sale of the property.

These exchanges are called "tax-free" exchanges because the exchange transaction itself is not taxed.