1031 Exchanges in Farmland

Our 1031 Exchange Program enables investors to either swap one investment property with farmland – a like-kind replacement property – or invest in a real property interest to enable tax savings at the time of sale.

1031 Exchange Program Overview

  • Swap one property with a "like-kind" investment or invest in a real property interest for future 1031 opportunities.

  • Potential to defer realization of capital gains, depreciation recapture, and other federal tax liabilities.

  • Access high-quality farmland sourced, vetted, and managed by FarmTogether’s team of experts.

  • Eligible through FarmTogether’s Tenancy in Common or Bespoke products.

FarmTogether 1031 Eligible Products

  • farm

    Tenancy in Common

    • Investment minimum starts at $500,000.

    • Ability to diversify across multiple TIC offerings.

    • Active deal flow with new TIC offerings available monthly.

  • farm


    • Investment minimum starts at $3,000,000.

    • Sole Ownership.

    • Customizable capital structure and risk-return profile.

Benefits of 1031 Exchanges

An investor hypothetically purchased an investment property for $500k and is in contract to sell that property for $1mm.

  • Assuming this is a long-term capital gain, this sale would create a Federal Tax Liability of approx. $100,000.

  • By leveraging a 1031 Exchange, this investor could defer this capital gain tax by investing in a like-kind investment.

  • In addition to capital gains deferral, 1031 Exchange may also help to offset depreciation recapture.

Potential Returns of Deferred Capital Gains

*Assumes 20% long-term capital gain tax rate. Based on projected net returns of FarmTogether’s Galaxy Organic Apple Orchard. These returns are based on projections and are not guaranteed.

Program Overview

Learn more about 1031 Exchange opportunities in farmland with FarmTogether.

How It Works

  • Introductory Call

    We’ll work with you to identify your target criteria, including: desired deal size, leverage, hold period, target returns, early income, high yield, diversification, and other special preferences.

  • Preliminary Investigation

    Our Investment Team will identify and provide preliminary investment recommendations (PIRs) for Bespoke or TIC properties that may be a good fit.

  • Management & Performance

    Our team will provide the ongoing management and monitoring of the property, as well as all accounting, distributions, and the preparation and timely issuance of financials.

Frequently Asked Questions

    • A 1031 Exchange is a like-kind exchange that occurs when proceeds from the sale of investment property are used to acquire a new investment property. The sale of the relinquished property would normally be a taxable event; however, if conditions of a 1031 Exchange are met, capital gains are not immediately recognized and associated tax liabilities may be deferred. IRS Section 1031 and like-kind 
      Exchange tax benefits have been around for over 100 years.

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    • All opportunities offered through FarmTogether are investments in real properties. Every offering is intended to be held for multiple years and is therefore eligible to meet the holding period requirement. These farmland offerings range from crowdfunding exchange opportunities requiring a minimum investment of $500,000 or bespoke offerings requiring a minimum investment of $3,000,000. Though the like-kind requirement must be assessed on a case-by-case basis for every 1031 Exchange, farmland property through FarmTogether commonly satisfies the like-kind condition. Farmland is eligible real property and can typically be exchanged with a variety of properties including apartments, hotels, office buildings, parking garages, or warehouses. FarmTogether also works directly with external legal counsel during the exchange to ensure your investment is structured efficiently and correctly.

      1031 Exchanges are an effective way to avoid paying capital gains taxes. If you meet the exchange requirements and are interested in an asset with decades of historical strong performance, consider whether farmland makes sense to hold in your portfolio. Get in touch with us via info@farmtogether.com.

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    • You have 45 days from the sale of the relinquished property to identify the potential replacement property. The entire exchange process must conclude within 180 days of selling the relinquished property. The exchange must also be completed before the next Federal tax return filing deadline following the sale of relinquished property. There is also an unspoken deadline regarding how long a property acquired via 1031 Exchange must be held. Though tax legislation is technically silent on the matter, a 1984 private letter issued by the IRS stated a holding period of two years was sufficient.

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    • “Like-kind” defines the nature or characteristics of the property, not the quality or grade of the property. The relinquished property and the replacement property must both be held for productive use in business or for investment. Real property can only be exchanged for real property, although you could sell one type of property and buy a different type of property. For example, the sale of an office building and purchase of farmland meets the like-kind exchange requirement. Eligible like-kind property can also be intangible such as air rights, easements, options, leases, oil and mineral rights, or development rights.

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Ready to Begin?

Schedule an introductory call with one of our investment professionals to begin the process of sourcing a property that meets your needs. Looking to learn more about FarmTogether first? Check out Why FarmTogether.

Why FarmTogether