<randyusenet[at]yahoo.com> wrote
- quote -

I'm not going to research it for current law changes, but I
remember there were provisions to do a 1031 exchange on
property taken for easements, the specific client lost a
portion of his land to road expansion. In that case though,
the city/county actually owned the property (the
right-of-way).

In a utility easement I'm not sure there is actually a
change of ownership, but I suppose there could be some of
that where they bought the footprint for the tower.
Otherwise, a payment for the running of the lines over your
property, where you still retain ownership and use of the
land, doesn't sound like it qualifies as a 1031 exchange.

If it qualifies for a 1031 exchange, all the rules apply,
and they are very strict on the intermediary rules.

--
Paul A. Thomas, CPA
Athens, Georgia

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<randyusenet[at]yahoo.com> wrote
- quote -

I'm not going to research it for current law changes, but I
remember there were provisions to do a 1031 exchange on
property taken for easements, the specific client lost a
portion of his land to road expansion. In that case though,
the city/county actually owned the property (the
right-of-way).

In a utility easement I'm not sure there is actually a
change of ownership, but I suppose there could be some of
that where they bought the footprint for the tower.
Otherwise, a payment for the running of the lines over your
property, where you still retain ownership and use of the
land, doesn't sound like it qualifies as a 1031 exchange.

If it qualifies for a 1031 exchange, all the rules apply,
and they are very strict on the intermediary rules.

--
Paul A. Thomas, CPA
Athens, Georgia

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ------------------------------------------------------- >

My question concerns when someone receives payment from a
utility company in exchange for running power lines across
the owners land. The land in question is a farm. As I
understand it, this is a capital gain and the basis would be
the basis for that portion of the land included in the
easement. I that correct? Also, is it possible to use the
proceeds to buy additional farm land and treat this as a
Like- Kind Exchange? If so, do the proceeds need to be
deposited with an intermediary or can they simply hold the
funds until the purchase is complete?

Thanks!

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ------------------------------------------------------- >