I'm looking to sell some land I have in Texas, so that I can buy some land in Kansas. I heard through the grapevine that you can do some sort of property exchange and then you don't have to pay taxes. Is this right? What did I hear about? Most likely what you want is a 1031 tax deferred exchange. Such exchanges do not automatically eliminate your tax liability, however they can DEFER it for years and perhaps decades. Do not begin to sell your Texas property until you have first spoken with an exchange expert. There are various deadline and paperwork requirements that must be met to have a proper exchange that meets IRS standards. For instance, you will need a third party to hold the proceeds from the sale of the first property, you must identify replacement real estate within so many days, etc.