Does 1031 exchange work on raw land?

[Laura Krukowski]

Just sold a parcel we owned- raw land. Made a 20k profit. Can you do a 1031 exchange on this or does it have to be a house?  I feel like I should know this but I don't. Thanks!

[Dave Foster]

@Laura Krukowski, Any type of investment real estate can be exchanged for any other type of investment real estate.  So yes, land held with an investment intent can be exchanged for any other type of investment real estate - commercial residential, etc.

Remember, like @Bill B. said, that the QI for your 1031 exchange has to be in place before you close the sale of your old property.  You can be under contract.  But you can't close without the 1031 being in place with your intermediary.

the bright side is that the tax on $20K won't be too large of a tax bill (although NY will stick it to you state wise) if you've already sold.  And by the time you factor in the savings by not doing a 1031 you're not going to be too bad off at all.