1031 Exchanges also known as Like-Kind Exchanges under Internal Revenue Code Section 1031, must involve business or investment property to qualify for a tax deferment. Like-kind exchanges of unequal value may involve taxable gain. The IRS has specific timelines for the completion of 1031 Exchanges. To avoid taking premature control of the proceeds before the transaction is complete, taxpayers usually employ qualified intermediaries and an attorney to handle the transaction. 1031 Exchanges can be complicated and steps must be taken to insure compliance with all of the rules and timelines to maximize the benefit of the exchange. The main advantage of a 1031 Exchange is the postponement of capital gains tax. The 1031, or Like-Kind Exchange is the selling of one property to purchase a similar property. The exchange is done for a variety of reasons including purchasing another property which may have a better cap rate or purchasing a property with a longer lease term.