If I Sell Land in a 1031 Exchange, Does My Replacement Property Need to Be Land?

Land Exchange

Like-kind exchange rules can get a tricky and confusing quickly. In this article, we are going to talk about the like-kind requirement as it relates to exchanges of land.

Real Property Like-Kind Rules

At the root of this question is the definition of like-kind property and how that impacts 1031 exchanges. As you may know, all property involved in a 1031 exchange needs to be like-kind in order to qualify. Thankfully, the definition of like-kind when it comes to real property is very broad. In general, you can exchange any real property for any other real property (so long as it meets the other requirements of an exchange). That means you can sell a piece of land and exchange into an apartment building (or vice versa). You do not need to exchange into another piece of land if you are exchanging out of a piece of land. You certainly can, but it’s not a requirement.

Consult with a Qualified Intermediary

At Commercial Partners Exchange Company, we put an emphasis on relationships. We work closely with all of our clients to make sure they understand the 1031 exchange process at each stage. With twenty years of experience in the like-kind exchange industry, our team can prepare all of your documents for closing, advise you on replacement properties, and answer all of your lingering questions. Contact us today at our office in downtown Minneapolis to set up a time to chat with one of our qualified intermediaries about your exchange.

  • Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.

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