A "Section 1031 Exchange" is a type of disposition of real estate described in Section 1031 of the Internal Revenue Code that allows the deferral of capital gains taxes, when exchanging one property for another "like kind" property. This is a transaction allows one to reinvest the proceeds of a sale of real estate to another property while deferring the capital gains tax which would otherwise be due on the sale. This is also known as a "tax deferred exchange" or "Section 1031 exchange."