1031 for farm exchange

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Joined: Mon Apr 01, 2024 5:32 pm

1031 for farm exchange

Post by ebk126 »

I own a 400 farm with 2 siblings as tenants in common.  The fellow who farms the land (not one of my siblings) may be interested in buying my 1/3 share of the farm. I would like to use the proceeds from that 1/3 share to buy another farm.My question is – can I use the 1031 process if I sell my 1/3 of share of the farm to the fellow who farms our land and my siblings continue to own their 1/3 each?  Note that the farm has not been divided into 3 equal parcels - we own the entire farm together.  My second question is do I have to exchange a finite parcel of the farm when doing the 1031?  That is, does the farm need to be divided into thirds before I do the 1031?
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Re: 1031 for farm exchange

Post by SuzBanyan »

Generally, you can do a 1031 of just your tenant-in-common (TIC) interest in investment property, but you will likely need to get the other TIC owner’s to approve. You should speak with an attorney and accountant with experience in managing 1031 exchanges.
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