A 1031 Exchange allows a property investor to swap one "Like-kind" property for another. Any gains realized from the sale can be rolled over into the purchase of a new property. Since you are using any gains to purchase the new property, you are not realizing the gains, so you do not have to immediately pay any taxes on this money. Taxes are deferred until you sell the new property, unless you do another 1031 exchange.
To qualify for a 1031 exchange, three criteria must be met:
Like-kind simply means replacing one type of investment with a similar type of investment. It does not have to be the exact same type of property, it just has to be an investment property. For example, if you sell a multi-family property, you can buy any other type of real estate that is considered an investment, such as another multi-family, a retail property, a condo or a plot of land.
No, only with investment property. You don't need the tax break when you sell your residence, most of that gain in not taxed (within limits.)