Avoiding Capital Gains Tax

Yes, § 1031 of the code is broad for real property. Generally, you can roll any type of real property into other real property and avoid recognition. For example, you can swap unimproved property for improved property. You can also swap residential property for business property, as long as the residential property isn't your principal residence.

In your case, you are perfectly fine exchanging real property for investment purposes into other real property for investment purposes. You could not, however, exchange it for say stocks or bonds and then try to raise § 1031.

Section 1031 refers to like-kind assets. You have to be able to demonstrate that the asset(s) you are acquiring are the same as those you are disposing of. So you would need to acquire another small business to have any chance of convincing the IRS that your replacement property is of like-kind.

And a 1031 exchange does not avoid tax on the gain it defers the tax until some future date. Who knows if the tax rates on capital gains will be as low as the 15% current rate.

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It's interesting to note that questions such as yours would be obsolete with a national sales tax, instead.

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So would most retirement plans that seek to avoid taxes. And municipal bonds - just try selling EBR Parish water bonds without the tax benefit.

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It's interesting to note that questions such as yours would be obsolete with a national sales tax, instead.

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Moot point and mostly irrelevant.
It's NOT "instead" of the income tax. It's "in addition to" the income tax. At least if the professional politicians have their way.

Just pay the CG tax on it and get it over with. You went in business to make money, remember.

Lots of people come into our office complaining about paying so much taxes. I tell them "I wish I paid your amount in taxes, It means I'm making a lot more money"

I wanna pay more taxes...just not more than I have to.