A 1031 property exchange allows individuals the opportunity to buy and sell property while deferring capital gains tax consequences. Learn what it takes to do a 1031 exchange in California and how you can cleverly leverage it to defer capital gains tax and build wealth.A 1031 exchange is a tax-deferred exchange that allows you to defer capital gains taxes as long as you are purchasing another "like-kind" property. How do I fill this out? To fill out this form, gather all necessary information regarding the properties involved in the exchange. The sale qualifies as an IRS Code Section 1031 exchange. 10.11 1031 Exchange. Typically boot is in the form of cash, mortgage debt or personal property received in an exchange. You must print the forms once you have filled them in. Move-in Inspection and New Contract​.