You've got a bungalow. They've got a brownstone. You need a new place. So you're thinkin'...why not swap? Is that legal? In certain cases, you betcha. And what's better... no one has to pay capital gains tax. You just need to do what's called a 1031 Exchange. Ahhh... but there's a catch. With a name like "1031" you knew there would be.