Exchanging farmland and agricultural property in a 1031 transaction allows you to sell your property in the most tax-advantageous way possible. In this article, we are going to discuss some tips for doing a reverse exchange of agricultural property.
Benefits of a Reverse Exchange
So why do a reverse 1031 exchange of agricultural property rather than a forward exchange? Well, both are perfectly legitimate ways of deferring taxes when selling your property, but a reverse exchange may be better suited to your particular situation. In a reverse exchange of farmland, the taxpayer purchases their new replacement property first and then subsequently sells their relinquished property within the 180 day exchange period. This is the reverse order of operations compared to a forward exchange. The benefit of doing a reverse exchange is that you can lock up your replacement property as soon as possible. This can be especially helpful when the market is hot and you’re competing with other buyers trying to find the perfect property for your situation. If you find a piece of farmland that perfectly suits your needs and you’re afraid it’s going to be snatched up before you can sell your relinquished property, then a reverse exchange is the name of the game.
Reverse Exchange Company
If you are considering a reverse exchange of your property, contact a qualified intermediary about your situation today. At Commercial Partners Exchange Company, our intermediaries have more than two decades of experience facilitating exchanges of real property for clients throughout the Twin Cities, greater Minnesota, and around the country. Contact us today at our downtown Minneapolis office to walk through the details of your exchange and start deferring your capital gains taxes!
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
Defer the tax. Maximize your gain.
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