Senate bill may affect 1031 exchanges...

Last week the Senate Finance Committee passed a bill which contains provisions that would affect 1031 exchanges. The bill is titled the "Heartland, Habitat, Harvest and Horticulture Act of 2007."

According to the bill, stock in some mutual ditch, reservoir and/or irrigation companies may qualify for a 1031 exchange. This applies to taxpayers who hold water rights through one of these companies.

Also, the selling of unimproved real estate in exchange for improved real estate will be disallowed if the owner is receiving Agricultural Program Payments or Commodity Credit Corporation loans. The exception to this would be if the undeveloped land is retired from farm program payments permanently.

Finally, exchanges of collectibles, such as artwork, will be disallowed. The Senate hopes that the collectibles provision will raise $175 million in tax revenue. The agricultural exchange provision is expected to raise an additional $27 million.

The remainder of the Senate, House and The President would have to approve the bill for it to become law.

The 1031 Exchange Experts will keep you posted.

--The Experts