My mother in laws house is in a life estate since 2003. We are going to sell

A 1031 tax-deferred exchange is a method by which a property owner trades one property for another without having to pay any federal income taxes on the transaction. In an ordinary sale transaction, the property owner is taxed on any gain realized by the sale of the property. But in an exchange, the tax on the transaction is deferred until some time in the future, usually when the newly acquired property is sold. These exchanges are sometimes called "tax free exchanges", because the exchange transaction itself is not taxed. Tax deferred exchanges are authorized by Section 1031 of. The requirements of Section 1031 and other sections must the Internal Revenue Code be carefully met, but when an exchange  is done properly, the tax on the transaction may be deferred. A replacement property does not need to be identical to that sold and can be other investment property.  The rules on a 1031 exchange is that replacement property must be identified within 45 days from the date of closing and such property must be closed on within 6 months from closing. Before entering into any such transaction, an experienced attorney who practices in  deferred exchanges should be contacted. - Alfred Polizzotto, III