What is equity exchanging? Inside a 1031 exchange, you can trade, swap and sell real estate. For example, You have 6 single-family residences and you want to swap those for 3 duplexes. You are able to swap without having to go through typical means of selling or having capital gains tax. 1031 exchanges come with rules and guidelines but it is a great way to protect your investment portfolio. This is a great show and explains in detail how to exchange real estate.