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.A 1031 Exchange Account is a tool to defer capital gains tax. In order to start a 1031 exchange, you need to take a few steps. The most important is you need to hire an exchange agent prior to your first closing. Thank you for contacting IPX1031. We look forward to working with you. The best time to open an exchange is soon after the property goes under contract. Gain deferred in a like-kind exchange under IRC Section 1031 is tax-deferred, but it is not tax-free.