This is not tax advice. We are not your qualified intermediary or your tax counsel. Run your facts through both.
A 1031 exchange is how investment real estate rolls into other real estate without an immediate tax bill. You sell property held for investment or for use in a trade or business. A qualified intermediary holds the proceeds so you never take receipt. You identify replacement property within 45 days and acquire it within 180 days. If the replacement is still like-kind real property, recognition of gain is deferred — not erased. That is the mechanism. The rest of the market is product sitting on top of it.
what the code is actually doing
Internal Revenue Code §1031 lets you defer recognition of gain (and of loss) when you exchange real property held for productive use in a trade or business, or for investment, for other real property of like kind held for the same kind of purpose. It is a roll, not a holiday. Basis carries forward. The tax is still there if you later sell for cash.
This is not a new asset class. It is not a conservation product. It is not a token. It is a real-property matching rule that has been in the code, in various forms, for a century. After the Tax Cuts and Jobs Act, the match is narrower: real property only. Equipment, vehicles, and other personal or intangible property dropped out of §1031 for exchanges generally completed after 2017. U.S. real property is not like-kind to foreign real property.
If someone is pitching a 1031 into something that is not real property under state law, they are not describing §1031. They are describing a different ticket.
This is not tax advice. The public rules below are the ones a qualified intermediary and a CPA already run. We are not your QI. We are not your tax counsel. Send the facts of your exchange to both of them before you name a replacement.
the public rules: real property, 45, 180, qi, boot
Four facts do most of the work. Industry marketing will try to add a fifth — the product they happen to sell. Hold these four.
Real property after the TCJA. The replacement has to be real property: land, and generally whatever is erected on, growing on, or affixed to land, held for investment or for use in a trade or business. A personal residence does not qualify. Property you hold primarily for sale to customers — dealer inventory — does not qualify. Improved real property can be like-kind to unimproved real property. A warehouse can roll into vacant land. A triple-net retail pad can roll into a ranch. The "kind" is real property, not the building's use. If you still hear "like-kind means same use," that is leftover from a tighter world — and from personal property, which is no longer in the statute.
Forty-five days to identify, 180 days to close. You identify replacement property in writing within 45 days after you transfer the relinquished property. You acquire it by the earlier of 180 days after that transfer or the due date of your tax return for that year, including extensions. Miss the identification window and the exchange is usually over, even if calendar time remains on the 180. The clock is the product. What you spend it on is a separate essay: you don't have a property problem. you have a 45-day clock.
A qualified intermediary holds the money. In a delayed exchange — the form almost everyone actually runs — you generally cannot receive the proceeds, even briefly. A qualified intermediary (QI) receives them, holds them, and uses them to buy the replacement. If you take actual or constructive receipt, you have a sale. Proceeds stay with your qualified intermediary. We work alongside that process on identifying and closing titled replacement property. We are not a QI.
Boot is the leak. Cash you take out, unlike property you receive, and certain mortgage relief can be boot. Gain is generally recognized to the extent of boot. The exchange can still happen; the deferral is just no longer complete. Equalize value and equity, or plan for tax on the difference. Your CPA runs that math. Nobody else should.
Those four facts survive whatever DST rate sheet is circulating this quarter. The tax is deferred only if titled real property replaces titled real property on the clock.
the default replacement is not the only like-kind door
You might already be holding a list from a net-lease broker: another dollar store, another drive-thru, a Delaware Statutory Trust share in a pool of the same. Those are useful products. A credit tenant and a long lease make a paycheck you can underwrite. They are not a legal monopoly on like-kind.
The default exists because it is easy to name inside 45 days, not because the code requires a credit tenant. Farmland, timberland, ranch, vacant land, and conservation property held for investment or business show up on industry like-kind menus as practice and state-law real-property character — not because the IRS published a nature catalog.
If the job is a passive paycheck, the NNN is an honest tool. That psychology — coupon, credit, residual — lives in a different post: the triple-net lease has a nature-shaped hole. That post is the paycheck. This series is the clock and the replacement object.
| object | what you actually hold | 1031 replacement? | what it is for |
|---|---|---|---|
| NNN (triple-net) pad | titled commercial real estate plus a credit lease | yes, as real property | a paycheck from a tenant |
| DST share | a beneficial interest in a trust that holds real property | often treated as replacement when the interest is real property — ask counsel; this is Rev. Rul. 2004-86 territory, not a ruling from us | a paycheck without managing the building |
| living land | titled farm, timber, ranch, vacant land, or conservation property held for investment or business | yes, if it is real property under state law and held for a qualifying purpose | residual in a living place |
| certificate (or coin) | a later funding claim on a named place, not title | no | condition after the deed — a different ticket |
The contrast is the point. Rows one through three are real-property conversations. Row four is not. If a pitch collapses those rows into "buy this instrument to finish your exchange," the pitch is wrong.
You might be thinking: then what is ensurance doing in a 1031 article at all? Fair. After you hold title, something still has to fund the living condition so the place you just bought is not the next thing converted to pay the tax you just deferred. Ensurance is that later layer. It is not the land. It is not like-kind property.
The farm, the timber, the ranch, the wet meadow, the grassland — the living place under title — exists whether or not anyone exchanges into it. A 1031 is how investment capital can buy that title without an immediate tax bill. Ensurance funds the living condition. It is not what the land is.
The deferred gain is a bridge so capital can hold a living place. It is not a claim that the ranch is worth the tax you saved. And it is not a subdivision residual: conservation property in a 1031 is a hold, not a flip into lots.
what like-kind actually counts
Like-kind property, in a post-TCJA 1031, is real property held for investment or for productive use in a trade or business, exchanged for other real property held for that same kind of purpose. The code does not require the replacement to be the same use as the relinquished property.
Can a multifamily sale buy a ranch? Can a net-leased pharmacy buy timberland? Can vacant land buy a wet meadow and the upland above it? As a matter of the public like-kind rule for real property, those are the same category if both sides are real property held for investment or business. Whether your facts fit — holding purpose, state-law character, identification rules, boot — is what your QI and CPA are for. We will not write you a ruling.
One adjacent trap: donating a conservation easement is usually a charitable contribution, not an exchange. Do not treat "easement" as a synonym for 1031. A purchased perpetual easement may be like-kind when it is real property under state law; that is private-letter-ruling territory. Ask counsel. Then go back to the simpler object: the land.
land on the identification list
Land can sit on the identification list when it is real property, you hold it for investment or for use in a trade or business, and you close it on the clock. 1031 land is not a special IRS bucket. It is ordinary like-kind real estate that happens to be living: farm, timber, ranch, vacant, conservation property.
That is the door this series exists to name. The industry will keep handing you a DST list because a DST list is what they have printed. Living land can still be named if someone is sourcing it now. We do not publish a replacement catalog on this page. We do not have a numbered ranch list. Andrus & Morgan is a licensed brokerage desk; 1031 Navigator is the advisory function inside that desk, not a separate live storefront. The next honest step is to see the investor doors, then spend the 45 days on a place rather than on another pad.
If you also have land to relinquish — a farm or ranch leaving your family, not only a building — that is a seller-side conversation, not this one: sell land without losing the place.
The instrument honesty lives in a certificate is not like-kind. Finish the exchange on title.
frequently asked questions
what is a 1031 exchange?
A 1031 exchange is a deferred like-kind exchange under Internal Revenue Code §1031: you dispose of real property held for investment or business and acquire other like-kind real property on a statutory clock, generally without recognizing gain at the time of the roll. A qualified intermediary typically holds the proceeds so you do not take receipt. The tax is deferred, not eliminated. This is not tax advice.
what counts as like-kind property?
After the Tax Cuts and Jobs Act, like-kind for §1031 generally means real property for real property — including improved and unimproved land — held for investment or for productive use in a trade or business. U.S. real property is not like-kind to foreign real property. Personal property and intangibles are outside the statute. A certificate or a coin is not like-kind. The land is.
can you 1031 into land?
Yes, when the land is real property held for investment or business and you identify and acquire it under the 45-day and 180-day rules. Farmland, timberland, ranch, vacant land, and conservation property are industry-standard like-kind candidates because of their real-property character, not because they are a separate IRS nature list. Confirm holding purpose and state-law character with counsel. Then read living land can be the replacement.
what to do with the clock
What remains is the object you name and the time you have to name it.
If you need the identification window, read you don't have a property problem. you have a 45-day clock. If the replacement should be a living place under title, read living land can be the replacement. If the job is still a credit-tenant paycheck, start with the triple-net lease has a nature-shaped hole — that essay is the coupon; this one is the clock.
When you want a desk that can source and structure land rather than another pad, start at investor solutions. We can start a conversation. We will not invent a public inventory to close the tab.
the series
1031 into living land — six posts on the buyer clock and the replacement object: