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Can I do a 1031 Like-Kind Exchanges Involving Building on Land I Already Own?

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edtarboosh

Junior Member
I live in MD, USA. I am considering selling some rental property and investing in more expensive rental property. My situation seems to conform with all the rules I've read but the rules I've seen are silent on one key issue that I fear might prevent compliance. I want to transfer the funds to build a rental property on land I already own. Assuming the cost of the building (not including the value or cost of the land) exceeds the proceeds from sold real-estate, can I do a like-kind exchange and if so, are there any special precautions or steps I must take?
 


FlyingRon

Senior Member
The term you're looking for is a "1031 improvement exchange." You can do this if you do it right. You need to make sure that the funds transfer and titling is done properly and that you complete the improvements in the 180 day period alotted. There are companies that specialize in handling these things (you must not ever take your own control over the funds involved in any amount).
 

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