A Deferred Exchange is a more complex, yet more flexible, variation of the typical 1031 Exchange. A Deferred Exchange allows you to dispose of property and subsequently acquire one or more other like-kind replacement properties. To qualify as a Section 1031 exchange, a deferred exchange must be distinguished from the case of a taxpayer simply selling one property and using the proceeds to purchase another property (which is a taxable transaction).
In a Deferred Exchange, the disposition of the relinquished property (which is being sold) and acquisition of the replacement property (the property being bought) must be mutually dependent parts of an integrated transaction. What this means is that the taxpayer will enter into an exchange agreement or contract using an exchange facilitator (like Brazos 1031) to both sell their property and acquire the new property within the IRS rules governing 1031 exchanges. If this is done correctly, the Deferred Exchange qualifies as a 1031 exchange.