But I love our country, and I’m happy to be a contributing tax payer.

@Joseph Labit, Your friend has to purchase at least as much real estate as he sold (25% of the new property) as the same tax payer who sold to start the exchange. 

Here are two fact patterns that I think everyone will find more digestible:#1: Taxpayer A leases and lives in a $2,000/month apartment used as a personal residence.  6 months into the 12 month lease, changed circumstances have made her apartment building much more attractive to the population's rental pool. 

Any tax paying entity can do a 1031 exchange. 

The "tax payer" for a property (the entity that has to do the 1031 exchange) is actually the tax return that reports the activity of the property. 

I tend to have a lot of expenses to be able to keep my tax payable low. 

If an IRA has an equity stake in such a business and does so on a regular or repeated basis, then an IRA is subject to taxation on Unrelated Business Taxable Income (UBTI), which is designed to level the playing field and protect tax-paying businesses from unfair competition.As such, for an IRA to participate in such deals, it is best to do so as a lender. 

So the taxpayer is not changing. 

We have no other address for the taxpayer but do for relatives.

This allows a taxpayer to exclude up to $250,000 ($500,000 for certain taxpayers who file a joint return) of the gain from the sale (or exchange) of property owned and used as a principal residence for at least two of the five years before the sale.