What's the grey area of 1031 exchange?

[Israel Sheffield]

I'm new to this forum.  New to selling rental property. I have a empty lot that is in my name that I would love to build on after I sell another rental property. I was told because the property is in my name I would still have to pay taxes.  What's the best way to reinvest my money and build on property that I already own?

[Dave Foster]

@Israel Sheffield, You can't.  Sorry :(.  You cannot 1031 into improvements on property you already own.  A quit claim or sale to another entity so you can then purchase it back would create a step transaction.  

If you were to buy a different lot using a reverse construction exchange you could accomplish what you want. Or you could sell both the lot and the other property and exchange into something already built that you liked.