The 1031 exchange derives its name from Section 1031 of the U.S. Internal Revenue Code. It allows investors to prevent paying capital gains taxes when selling an investment property by reinvesting the proceeds, within a certain time period, in a property or properties of like kind and of equal or greater value. There are certain stipulations regarding timing, debt and pricing that revolve around these exchanges. Make sure you are aware of such and set up your 1031 through a certified accommodator.