Can I 1031 sales proceeds for new build on already owned lot?

[Bryan Leon]

I'm selling an investment property and want to know if the proceeds can be used towards a new build on an empty lot I already own. Does this type of procedure qualify for the capital gains exemption?

[Dave Foster]

@Bryan Leon, the quick answer is no.  You cannot exchange into improvements on property you own.  There is a process that is extremely hairy and complicated called a lease hold exchange where you sell your property to a related party and then lease it back after 180 days.  And then while you are leasing it the improvements are made.  Not for the faint of heart or the shallow of wallet.  In the initial days of these we did quite a few.  But each year the IRS has continued to shoe their dislike and distrust of the arrangement.  And have continued to tighten the cranks.  Theoritically possible. But lots of expensive moving parts with very little statutory guidance.