Sec. 1031 exchanges permit an indefinite postponement of taxes—until you actually cash out or die.
Consider this: when selling a property, an investor may transfer the proceeds to a better property, improve cash flow, sit back while a professional real estate operator deals with day-to-day management and hold the investment for about five years. Then, the investor might sell the property for a profit and either cash out (and pay the required taxes) or exchange into another property and increasing cash flow again. Assuming the investor continues to exchange into a new property every five years, a stepped up basis will be applied to the gain and the capital gains tax will be forgiven. (The investor's estate will still be responsible for the tax on the accumulated depreciation.)