In the general course of business the sale of property that results in a gain is subject to capital gains tax. A taxpayer who wishes to avoid payment of capital gains taxes may be able to structure the transaction as an exchange instead of a traditional sale. Under Section 1031 of the Internal Revenue Service Code, transactions that qualify as an exchange are tax-deferred for the purpose of capital gains tax. A Section 1031 Exchange involves the exchange of “like-kind” property held for use in trade, business, or investment.