New York 1031 Exchange rules allow investors to defer capital gains on the sale of qualified property if exchanged for like-kind property. Section 1031 property exchanges make it possible for real estate investors to sell one property and reinvest the proceeds in a new property.Legal 1031 provides a form to identify property with each set of exchange documentation. Section 1031 property exchanges make it possible for real estate investors to sell one property and reinvest the proceeds in a new property. Purchase and Sales Contract Wording Optional 1031 language you can use in the contract for both your Old and New Property. Gain is deferred, but not forgiven, in a like-kind exchange. You must calculate and keep track of your basis in the new property you acquired in the exchange.