Thursday May 29th - Must 1031 Exchange Be in Same State? Question: If I'm looking to do a 1031 exchange, must both properties have to be in the same state? Answer: No. The idea of a tax-deferred exchange is to trade "like kind" properties, not necessarily properties located within a single state. Thus, for example, you could trade a rental home in Maryland for a duplex in Ohio or a strip center in Florida for a farm in Kansas -- all are real estate. Tax deferred exchanges must follow strict guidelines established by the IRS. This is not a do-it-yourself job. Get help from an experienced broker, exchanger or attorney.