Leveraging a Section 1031 Exchange has a
Range of Benefits

ANY real estate held for productive use in a trade or business or investment purposes is considered like-kind. Therefore, the ability to exchange your agricultural land for other types of real property may provide you the opportunity to diversify your investment portfolio and potentially increase your income.

Important Note: It is important to know that when considering the sale of your agricultural land; equipment, livestock, and crops are not exchangeable under IRC  Section 1031, although water rights and mineral rights may be exchangeable under certain conditions.

1031 Timeline Requirements

To execute a successful 1031 Exchange transaction, there are specific guidelines that must be followed. You will need to identify a replacement property within 45 days of the sale of your relinquished property, with the entire 1031 Exchange timeline being no longer than 180 days from the sale of your relinquished property.

Three Basic Steps to Follow

While there are several requirements governing a 1031 Exchange, you will generally follow a simple, three step process:

1. 1You sell your property, known as the relinquished property, and the proceeds are escrowed with a Qualified intermediary (QI)
2. 2Your QI, through a written agreement with you, transfers funds for the purchase of your replacement property.
3. 3You receive your new property.

Deciding to sell your agricultural land might have been a difficult process. However, using a 1031 Exchange to reinvest the proceeds from that sale needn't be.