Update on Section 1250 Exchange Rules

My friend Chris Hesse indicated I need to update my discussion on Section 1250 property in a farm 1031 exchange

Photo by Tyler Delgado on Unsplash

In our previous post on 1031 farm exchanges, we did not do the best job of explaining how 1250 property is handled in the exchange. My friend Chris Hesse reminded me and this post will provide an update.

A farmer may be able to exchange land with a farm building (Section 1250 property) into farmland with no Section 1250 property in certain situations.

If the building was originally depreciated on a straight-line basis, then the farmer can simply exchange into farmland.