I was driving into work today and saw a track of land with a sign in front of it. This property protected by a conservation easement. Local government, state and non-profits often seek to preserve open space so this type of sign has become increasingly popular over the years, particularly since the 1970s.
A conservation easement restricts the development of land and runs with the property deed. It prevents the current and future owners of the property from improving on it allowing the land to stay in its natural or historical state forever.
Any real estate that is held for productive use in a trade or business or for investment purposes qualifies for like-kind treatment under Section 1031. This includes conservation easements.
While conservation easements don't involve relinquishing the title of the property, they do qualify as like-kind property for 1031 purposes. A Taxpayer can exchange a conservation easement for additional unimproved land or improved real estate and begin generating a new cash flow.
There are several types of easements that qualify for like-kind treatment under Section 1031. These include utility easements, billboard easements and cell tower easements. Stay tuned for the next More, More Monday to learn about these easements.
Contact 1031 CORP. today to discuss your exchange and how an easement may work for you.
