A 1031 Exchange allows an investor to exchange one property for another and have it be tax free. Once a 1031 Exchange has begun it needs to identify at least one replacement property within 45 days after relinquished property has closed.AGREEMENT TO PARTICIPATE IN A TAX-DEFERRED EXCHANGE: Buyer and Seller agree to participate in a like-kind tax-deferred exchange under Section 1031 of the. Maryland 1031 Exchange rules allow investors to defer capital gains on sale of qualified property if exchanged for like-kind property. When completing the form, the taxpayer should check the box indicating that the sale is part of a 1031 exchange. But one question that comes up frequently is, can you do a 1031 exchange between states? The short answer to this is yes. On or before the Transfer Date, Taxpayer shall transfer the.