The Impact of Section 1051 Tax-Deferred Exchanges on Agricultural Land Sale Values

摘要

This study evaluates agricultural land sales in Nebraska associated with Section 1031 tax-deferred exchanges and quantifies price differentials between exchange and nonexchange sales. A broad analysis of 926 agricultural land sales that took place in the first half of 2009 indicates that exchange sales sold for 10.2% more than conventional sales, based on means, or 2.7% less than conventional sales based on medians. Analysis of a more detailed data set containing 25 subject exchange sales and 54 comparable nonexchange sales in 2006-2007 indicates a price premium of 6.2%. Seller knowledge of exchange transactions did not appear to influence sale prices.