The Impacts of the Tax-Deferred Exchange Provision on Farm Real Estate Values

摘要

This study examines the effects of the Section 1031 tax-deferred exchange provision on agricultural land values. The provision allows taxpayers to defer taxation for relinquished productive assets if a like-kind asset is acquired within the allotted time of 180 days. The analysis examines a set of3,580farm real estate transaction from 55 agricultural counties in Indiana over the period 2003-2006. Hedonic price analysis suggests that properties acquired under a like-kind exchange are associated with a1.32% price premium.