For 1031 investing purposes, a relative is someone that is directly related to you in a straight line. Think of it this way: Linear = NO; Diagonal = YES. Your parents, grandparents, brothers and sisters, children and grandchildren, and your spouse are related to you horizontally and vertically, so they are not allowed.
Aunt Matilda and your cousin Fred are related to you diagonally. Therefore the IRS does not consider them "related," and you are eligible to buy exchange property from them or sell exchange property to them.
Also, be aware that organizations like companies and trusts can be "related" to you too. If you own a significant portion of an organization, you may not be able to involve the organization in your exchange. Consult the Experts whenever related party issues may be a part of your exchange - we'll help you sort out the rules.
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