Ending 1031s hurts land conservation, farmers
We don’t inherit the earth from our ancestors, we borrow it from our children. —Native American proverb
March 23, 2021 | Dan Wagner | Chicago Agent Magazine
As the proverb suggests, land conservation and farming are inextricably connected, because those who make their living from the land are also stewards of the land charged with protecting it for future generations. The 1031 like-kind exchange is an important financial tool and incentive that farm and conservation communities can utilize to achieve their shared goals.
Under section 1031 of the U.S. tax code, like-kind exchanges allow real estate owners to reinvest their gains from the sale of income-producing properties into a similar, or like-kind, property while deferring the capital gains taxes in the process. In the future, when the owner of the land eventually liquidates the investment, the government collects its rightfully due taxes.
Land Conservation Utilizing the 1031 Like-Kind Exchange
One of the major initiatives for the land conservation community is to protect 30% of our nation’s land by 2030 (also known as “30×30” in the conservation community). The use of the 1031 like-kind exchange by land owners is a tool to help achieve this goal.
