Trading dirt for dirt: the 1031 exchange.

Section 1031 of the federal tax code lets an investor sell real property held for investment or business use and roll the proceeds into other like-kind real property — deferring the capital gains tax that a plain sale would trigger. "Like-kind" is broad for real estate: a rental duplex can become a cattle farm; a commercial lot can become 200 acres of timber. For land investors, it's the engine that lets a portfolio grow untaxed until the final exit.

The rules that can't bend

• 45 days — from closing on the property you sell, you have 45 calendar days to identify replacement property in writing.
• 180 days — you must close on the replacement within 180 days of the original sale.
• Qualified intermediary — you can't touch the money. A QI holds proceeds between closings; take receipt of the funds and the exchange dies.
• Equal or up — to defer the full gain, buy replacement property of equal or greater value and reinvest all the equity.
• Real property only — since the 2017 tax law, 1031 applies only to real estate held for investment or business — not your home, not property held mainly for resale.

Why Tennessee land is a popular landing spot

Tennessee levies no state income tax on individuals — so a gain rolled into Tennessee land isn't building up a future state-level tax bill the way it might elsewhere. Add productive ground, strong long-term demand, and greenbelt taxation that keeps carrying costs low on qualifying farm and forest land, and you have the reason so many of the 1031 buyers we work with are calling from out of state.

Both sides of the exchange

Selling Tennessee land? Exchange buyers are motivated and on a deadline — they close. We market to them deliberately. Buying into Tennessee on an exchange? The 45-day window is no time to start learning counties. Tell us your criteria before your sale closes, and we'll have candidate properties — with access, perc, and title questions already answered — ready when your clock starts.