Many options in tax law are elective. However, exchanges of real property are not elective. If an exchange meets the qualifications of Sec. 1031, exchange treatment is mandatory, and taxpayers cannot opt (elect) out.

Sec 1031(a)(1) – “Nonrecognition of Gain or Loss from Exchanges Solely In Kind - In general, no gain or loss shall be recognized on the exchange of real property held for productive use in a trade or business or for investment if such real property is exchanged solely for real property of like kind which is to be held either for productive use in a trade or business or for investment”.