Can farmland be a replacement property in a 1031 exchange?
Yes. For real property, "like-kind" is broad — any U.S. investment real estate can exchange into any other. A rental duplex, an office condo, or an apartment building can roll into a vineyard, orchard, ranch, or row-crop farm. Turnrow closes ag purchases in 2–4 weeks, comfortably inside the 180-day window.
People assume like-kind means "same kind of property." It does not. For real estate, the IRS treats nearly all U.S. real property held for investment or business use as like-kind to all other U.S. real property held the same way. Improved can exchange into unimproved. Urban can exchange into rural. A strip mall can become 300 acres of almonds.
What matters is purpose, not category. Both the relinquished and replacement properties must be held for investment or productive use in a trade or business — not as your personal residence. A leased-out farm, a custom-farmed orchard, or a vineyard under a crop-share agreement all qualify.
One boundary since the 2017 tax law: only real property qualifies. Equipment, breeding livestock, and water rights that are personal property under state law cannot ride along in the exchange. Allocate the purchase price accordingly, and confirm treatment of any included assets with your CPA.
The Turnrow angle
Exchanging into ag is Turnrow's core lane. We lend up to 70% LTV on non-owner-occupied farmland, vineyards, and ranches in all 50 states, with a written term sheet in 24–48 hours.
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