Description: This addendum is to be attached to a contract where either party intends to use the property to accomplish a Section 1031 Exchange. Texas 1031 Exchange rules allow investors to defer capital gains on sale of qualified property if exchanged for like-kind property.Generally, if you make a likekind exchange, you are not required to recognize a gain or loss under Internal Revenue Code Section 1031. "Buyer is aware that seller intends to perform an IRC Section 1031 taxdeferred exchange. What Are The Texas 1031 Exchange Time Limits? Your client can have 1031 language in the sales contract, but it is not required. Thank you for contacting IPX1031. We look forward to working with you. 1031 Exchange Guide outlines the basics of Section 1031 likekind exchanges so you can figure out if an exchange is right for you. The form requires a description of the relinquished and replacement property, acquisition and transfer dates, and other information.