CPA-led 1031 exchange guide
1031 Exchange for Land
Raw land held for investment qualifies for 1031 treatment just like any other real property. That makes land one of the most flexible 1031 vehicles — you can exchange land for improved property, or improved property for land, as long as both are held for investment.
When investors use a land 1031
- Selling appreciated land and acquiring cash-flowing improved property
- Trading improved property for land in a long-term play
- Consolidating scattered lots into a single development parcel
- Exchanging out of farmland into commercial or residential investment
Holding intent
Land held for personal use, future personal residence, or as dealer inventory (lots flipped quickly) does not qualify. Land held for long-term investment does.
Improvement considerations
Standard delayed exchanges don't allow you to use exchange funds to improve the replacement property after closing. If you want to build, an improvement exchange structure is required, completed within 180 days.
Frequently Asked Questions
Can farmland be exchanged?
Yes. Farmland held for investment or productive use qualifies. The residence portion of a farm needs to be carved out separately.
Can I exchange land for a rental house?
Yes. Any U.S. real property held for investment is like-kind to any other. Land for a rental, rental for land — both work.