Bob decides to sell a duplex that he has owned as an investment property for 8 years originally purchased for the amount of $70,000, and is now worth $750,000. His real estate broker has recommended that he obtain a Qualified Intermediary in tax deferred exchange, thereby deferring payment of capital gains taxes. The real estate broker finds Bob an office building valued at $3,000,000 for his replacement property. Bob is successful in the exchange process and as a result does not have to pay capital gains taxes in the amount of $102,000. ($750,000 less original purchase price of $70,000 equals $680,000 profit. Capital gains tax is 15% times $680,000 equals $102,000.) He is able to purchase the office building leveraging the net proceeds from his duplex. Bob was able to purchase a property worth $408,000 more using the 1031 exchange.