---
title: How Long Can You Wait to Do a 1031 Exchange After the Selling of Farmland?
description: And yes, exchanging into (or out of) farmland is possible. But how long can you wait to conduct that exchange after selling that farmland?
---

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# [How Long Can You Wait to Do a 1031 Exchange After the Selling of Farmland?](https://www.realized1031.com/blog/how-long-can-you-wait-to-do-a-1031-exchange-after-the-selling-of-farmland)

 Written by [The Realized Team](https://www.realized1031.com/blog/author/the-realized-team) | Dec 6, 2023

A successful 1031 exchange process requires strict adherence to deadlines and an understanding of regulations. One example is exchanging your relinquished property for a replacement property (or properties) of [equal or greater value](https://www.realized1031.com/blog/can-i-sell-two-properties-and-buy-one-in-a-1031-exchange).

And yes, exchanging into (or out of) farmland is possible. But how long can you wait to conduct that exchange after selling that farmland?

There are a couple of issues here. First, selling that farmland before moving forward on a 1031 exchange is considered a “straight sale,” which will likely trigger a taxable event. Second, if you decide to sell that farmland after initiating (and concluding) a like-kind exchange, it’s a good idea to hold on to that property for a specific period.

### The Straight Sale

A straight sale aims to strike a deal with a buyer, determine an escrow period, and close the transaction. There are many reasons why a straight sale could be more advantageous than a 1031 exchange. [These can include](https://www.realized1031.com/blog/what-are-the-advantages-and-disadvantages-of-a-1031-exchange) timing, inability to find the right replacement property, no access to investment capital, and the very stringent IRS rules. 

Furthermore, is it possible to move forward on a 1031 exchange after a straight sale? [In most cases, no](https://www.realized1031.com/blog/can-you-still-do-a-1031-exchange-after-a-sale). The reason is that you’re not allowed to have possession of the proceeds from your relinquished asset, in this case, farmland. 

If you’re considering selling your farmland through a straight sale, be aware that you’ll likely be on the hook for capital gain and depreciation recapture taxes. 

### The 1031 Exchange

Selling farmland (the replacement property) is possible after completing a 1031 exchange. But it’s a good idea to allow plenty of time between the exchange’s conclusion and the straight sale of that property. The IRS carefully monitors timing when it comes to like-kind exchanges.

If you decide to sell the replacement property immediately after the exchange’s completion, you could lose out on any potential tax-deferral benefits. This is because the IRS might not consider that you’re holding on to the property for investment purposes but rather [to “flip” it](https://www.realized1031.com/blog/real-estate-flipping-and-1031-exchanges-what-you-need-to-know).

Another challenge is that the IRS doesn’t mention a specific timeline for holding that replacement property. In 1984, [the IRS issued a Private Letter Ruling](https://www.realized1031.com/blog/what-are-the-holding-period-requirements-for-a-1031-exchange) indicating that two years would be considered an acceptable property holding period on real estate held for investment. 

### Timing is Everything

A successful 1031 exchange requires specific timing and an understanding that the farmland you exchange out of (or into) must be held for investment purposes. As such, you can’t conduct a like-kind exchange after a straight sale. Furthermore, if you want to sell your farmland after concluding a 1031 exchange, wait for at least two years. 

Because of the 1031 exchange’s complexities, be sure to work with a professional familiar with the deadlines and procedures.

[View full post](https://www.realized1031.com/blog/how-long-can-you-wait-to-do-a-1031-exchange-after-the-selling-of-farmland)

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