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

John G. Dillard, Todd H. Kuethe, Craig Dobbins, Michael Boehlje and Raymond J. G. M. Florax


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 of 3,580 farm 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 a 1.32% price premium. (JEL H23, Q15)

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