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Proposed Change to Section 1031 of the IRC: Subsidized Agricultural Land or Farm Land

By
Services for Real Estate Pros with Exeter 1031 Exchange Services, LLC President & CEO

Proposed Change to Section 1031: Exchanges of Subsidized Agricultural Land or Farm Land

The Farm Bill that is currently pending before the United States Congress contains a provision that would affect Section 1031 of the Internal Revenue Code, including the exchange of subsidized agricultural land (ag land) or farm land. 

Essentially, farm land that is subject to the payment of subsidy payments can only be exchanges with other land that is also subject to the payment of subsidy payments.  The farmer (investors/taxpayer) could not exchange subsidized ag land for non-subsidized ag land unless the farmer gave up the subsidy. 

Lobbying Efforts

The Federation of Exchange Accommodators is lobbying heavily against this bill.  I will keep you updated on its progress. 

Comments (3)

Bill Roberts
Brooks and Dunphy Real Estate - Oceanside, CA
"Baby Boomer" Retirement Planner

Bill, I can understand why farmers might want to oppose this bill but why would accommodators oppose it? Shouldn't they maintain a sense of neutrality here? Or is their ox being gored?

Bill Roberts

Jan 20, 2008 02:08 AM
Bill Exeter
Exeter 1031 Exchange Services, LLC - San Diego, CA
1031 Tax-Deferred Exchange Expert

Hi Bill,

We initially did not oppose it, but then we realized that anytime Congress begins to whittle away at Section 1031 we need to oppose it in order to keep them away from making more drastic changes. 

Jan 20, 2008 03:55 AM
Bill Exeter
Exeter 1031 Exchange Services, LLC - San Diego, CA
1031 Tax-Deferred Exchange Expert
This provision has been dropped from the Farm Bill.  It is no longer a concern. 
Jan 27, 2008 01:46 PM