1031 Exchanges with Nebraska Farmland

Using a 1031 like-kind exchange with Nebraska farmland lets investors defer federal and state capital gains taxes when they sell an investment property (like crop ground, ranchland, or pasture) and reinvest the proceeds into another like-kind real estate investment. Under IRS Section 1031, as long as both the relinquished and replacement properties are held for investment or business use, the gain on the sale can be rolled into the new property without recognizing taxable income at the time of the transaction. This strategy helps preserve wealth, keep more capital working for you, and grow or reposition your agricultural real estate portfolio over time.

To complete a 1031 exchange successfully, there are strict IRS timelines and rules you must follow: after selling your Nebraska farmland, you have 45 calendar days to identify potential replacement properties in writing and 180 calendar days from the sale to close on the new property. All sale proceeds must be handled through a Qualified Intermediary (QI) — you cannot take possession of the cash yourself — or the exchange could be disqualified. The replacement property must be of equal or greater value and you must reinvest all net proceeds to defer all of the gain; any cash taken out (called boot) becomes taxable.

Because of these timing requirements and technical rules (including identification options like the “3-property rule,” “200 % rule,” or “95 % rule”), planning well in advance with a qualified intermediary, tax advisor, and farmland expert familiar with Nebraska 1031 exchanges is essential. With careful coordination, a 1031 exchange can be a powerful tool for landowners looking to defer tax, reposition their holdings, or transition into different types of real estate without immediate capital gains consequences.