Internal Revenue Code Section 1031 is one of my favorite code sections. That is saying something coming from a tax geek like myself. What is a 1031 exchange? Generally speaking, a 1031 exchange is a swap of one business or investment asset for another. If you follow the 1031 rules, you’ll either have no tax or limited tax due at the time of the exchange which allows your investment to grow tax deferred. The rules can get complicated so the following are some things you should know if you are considering an exchange.