Many people are doing 1031 exchanges of real estate. A subsection of real estate would be the granting of a perpetual easement, such as a conservation easement. Significant interests like a perpetual transfer of rights in your property that restrict your ability to use it and to fully exploit every aspect of it – those interests can be 1031 exchanged. More importantly, these interests can be exchanged into a fee title interest in other real estate.
For example, a farmer who is granting a 30-year encumbrance such as a conservation easement or watershed restriction may be able to 1031 exchange that interest into other property that is like-kind (i.e. real estate that’s in the United States that’s going to be held for investment or business purposes).
So not only can fee title be exchanged, lesser interests can also be exchanged. This is an important tax planning opportunity for anyone considering granting a conservation easement or a similar kind of restriction that affects their property either perpetually or for a period of 30 years or more.
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
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