Approximately .2 seconds after submitting my last post about certain agricultural lands possibly being deemed not like-kind to other real estate I got an update that, thankfully, this issue now looks to be ironed out!
With the lobbying of Dave Brown, an Iowa-based Qualified Intermediary, and Max Hansen of Montana, Senate Bill 2242 proponent Democratic Senate Finance Committee Chairman Max Baucus, also from Montana, has indicated that he now opposes the provision. So, it will likely be pulled from the final version.
What does this mean for REALTORS and Escrow companies?
As I see it, there are two ways to look at this issue, both of which benefit REALTORS, Escrow companies, and the real estate market on the whole. First, if the Farm Bill went through, then farmers wouldn’t be able to exchange out of their farms upon retirement and buy other properties. That would obviously hurt their realtor’s wallet. The second way to look at the issue is that if the Farm Bill were to go through, then this would be the first legislative step towards eliminating 1031 exchanges overall. With the fears people already have about 1031 exchanges because of the yay-hoos that skipped town with peoples’ 1031 money, passage of this bill would be tough to overcome the downward spiral of you and your clients buying and selling properties tax-deferred. From “scary stuff” last night, now we can breath a little easier.