Here is some background information. I had bought 25 acres in Harris County in 2003 with the intent to retire and build a house in the middle of the property. Plans changed...I moved to Harris County and started a real estate career. I decided to sale the land. I paid $75,000 for the land I sold a portion in 2006 and the balance in 2007. Total sales price was $262,500 excluding some survey cost and closing cost.
Now the rest of the story..... I was working with a client a couple of years ago looking for some replacement property in a 1031 tax-deferred exchange. He looked at me and ask 'Do you own any land?' I said no. I had been looking passively. I decided it was time to get on the ball. Soon after, I purchased 52 acres of timberland and recreational property in Johnson County. I just negotiated a 'timber contract' for the first thinning.
For Information on Buying or Selling Land contact G. Kent Morris, ALC, RF at (706) 457-0090
Have you heard the IRS issued a changed to the 1031 tax code effective 2012. Supposedly, under the new code no one whose business is buying and selling land will be eligible for 1031 transaction. Ouch!
ReplyDeleteBoth the exchanged (relinquished) property and the received(replacement) property must be held for productive use in trade or business (1231 property), or for investment (1221 property). Rental properties and farms are good examples of property held for use in business. A personal residence and property held primarily for sale,known as dealer property are not qualified property types. Dealer property would be like lots in a subdivision. I am not aware of the 2012 changes you mentioned. Can you tell me more?
ReplyDelete