While both Deferred Sales Trusts and 1031 Exchanges allow for the deferral of capital gains taxes, there are key differences between the two strategies. A 1031 Exchange is limited to real estate transactions and requires the property owner to reinvest in like-kind property. In contrast, a Deferred Sales Trust can be used for various asset types, including businesses and high-value assets, and allows for diversification into a wider range of investments.