Farming is big in Minnesota. The state ranks fifth in the nation for agricultural production. Sometimes farmers want to upgrade and purchase additional land. A 1031 exchange is a great option to defer the capital gains taxes on the sale of your farmland and keep that money working for you by investing it into newer, bigger farmland.
Our qualified intermediaries have years of experience facilitating 1031 exchanges in Rochester, Minnesota. Give us a call today to set up your 1031 exchange 877.373.1031.
1031 Exchanges of Farmland
Farmers can defer their taxes on the sale of agricultural equipment, in addition to farmland itself. Farmland is considered real estate, which means the like-kind requirements are very broad. Farmers can exchange farmland for farmland, or into other business segments entirely.
Similar to other types of 1031 exchange, farmland exchanges need to abide by the 45 day / 180 day deadlines of any standard exchange. Additionally, you need to make sure you are rolling your sales proceeds into a replacement property that is of equal or greater value to your relinquished property.
Exchanging Between Business Segments
In addition to exchanging one piece of farmland for another piece of farmland, you can also do a 1031 exchange into a different business segment. For example, you could sell your farm and roll those capital gains into a fast food restaurant building, or a Walgreens. Remember, in a 1031 exchange you can sell one replacement property and exchange into several replacement properties. Selling your farmland and spreading yourself out into several business segments will help diversify your portfolio and keep your investments safe in the long run.
Start Your Rochester 1031 Exchange
Farmland exchanges can be complex. There are many rules and regulations that you need to abide by for a successful exchange. Having a qualified intermediary to guide you through the process and prepare all the necessary documents can be the difference between a failed and a successful 1031 exchange.
Give our qualified intermediaries a call today to discuss 1031 exchanges of farmland or other real property 877.373.1031.