Section 1031 allows deferral of the gain. Massachusetts 1031 Exchange rules allow investors to defer capital gains on sale of qualified property if exchanged for like-kind property.But one question that comes up frequently is, can you do a 1031 exchange between states? The short answer to this is yes. Providing Massachusetts investors with 1031 Exchange replacement properties guidance, FAQ, rules and 1031 Exchange listings. To complete the exchange, you only need to purchase properties that have an aggregate value matching that of the original. A Section 1031 exchange is one of the few techniques available to postpone or potentially eliminate taxes due on the sale of qualifying properties. The form is filed for the tax year in which the taxpayer transferred property to another party as part of the exchange. A Section 1031 exchange is one of the few techniques available to postpone or potentially eliminate taxes due on the sale of qualifying properties. Investors can defer capital gains taxes on Massachusetts real estate investment sales through IRC Section 1031.