How 1031 exchanges work when selling land

Sell an investment property, and the appreciation gets taxed unless you reinvest the proceeds into a like-kind replacement within the rules. Done in order, it defers the gain, keeps your capital working, and often lets you span into a larger or better-interest property.

Two dates nobody moves: you identify candidate replacement properties within 45 days of the sale, and you close on the replacement within 180 days. If you are a landowner with a purchase ahead of you, this is why we sequence early. The identification window is the most common beginner mistake, and it is preventable.

Real property is like-kind to real property, so farms, wood lots, home sites and other income real estate all generally qualify. The proceeds must go through a qualified intermediary, and the paperwork has to be routed correctly. I work with the experienced accommodator and your tax accountant from the first appraisal date, not from the last.

Most 1031s I watch are farm to farm, land to recreation, or a rental to an income tract. That becomes a coordinated sale and purchase with three dates on the calendar. That is my comfort zone: I keep the two threads moving in step, so the exchange closes and the family keeps the capital working.