Can we 1031 into a new building? Top 50 Questions about Farmland

Hey, it's the Iowa land guy and here's the top 50 questions that I get asked about farmland. So if I sell my farmland, can I 1031 tax defer exchange that money or earnings into a new building? The answer is yes. It's called an improvement exchange. And in that 1031 tax deferred, again, not avoiding, we're just deferring it or kicking the can down the road.

Uh, but can we put that money maybe not into more farmland, but into a new hog building or a new cattle building or facility or shop? You can, but the same time limits apply. It's still 45 days to recognize and 180 to close. So does that mean that I can just have the materials purchased? And I'll put it up later.

No, the building has to be completed by that 180 day time period. So if you're thinking about doing an improvement exchange, timing is everything. We need to have that whole process started, the contractor's there, all the materials ordered, and we need to be starting the building process right as soon as we sell our property and get it built and completed and paid for prior to that 180 day window.

David Whitaker | Iowa Land Guy