Naturally, most real estate investors are aware of the major benefits of an IRS 1031; however, there are some other benefits that are not quite as well known. One such benefit is the reverse 1031 property exchange, which is a fairly recent development that allows an investor to acquire the replacement property first and then sell the existing property. Since an investor is not allowed to hold the titles to both properties at the same time, a Qualified Intermediary will hold on to one of them, but this does tend to make it a more expensive transaction than a traditional 1031 exchange. This is most beneficial in markets where properties are selling fast, and many potential replacement properties are purchased by other buyers first.

If an investor buys a replacement property of lesser value that the one being sold, then this is called a partial exchange and the investor must pay the relevant tax on the difference in property values. This type of 1031 properties exchange provides flexibility for investors who only want to reinvest part of their capital gains into new, "like kind" property.

An IRS 1031 may also be completed by an investor with US real estate investment property in a few unique ways that still allow the property to be considered "like kind." Oil and gas investments and water and mineral rights are a few of the avenues that might be allowed as a 1031 exchange, as well as TIC (tenant-in-common) investors that share a fractional part of a large commercial building.

There are also times when foreign exchanges are considered to be "like kind" properties, such as when the investor exchanges a foreign property for another foreign property. For instance, exchanging a French property for a Canadian property would be allowable, whereas exchanging a U.S. property for a Canadian property would not.

Another possible way to take advantage of the IRS 1031 code is by utilizing improvement exchanges, which are also called construction or build-to-suit exchanges. Using this enables the investor to have a QI hold the title on a replacement property that they have purchased at a value less than the original property. The investor then has 180 days to make the improvements so that the value on the new property will be valued at the necessary amount to receive the full tax deferral.