Video: Considerations for Easements as Relinquished Property in a 1031 Exchange

In this educational video, we take a close look into the use of easements and long-term leases as Relinquished Property in a 1031 Exchange, highlighting the key requirements for these property types to qualify as like-kind property. Requirements include easements must generally be perpetual and require careful attention to the terms of the agreement. Similarly, leasehold interests often need to be structured as long-term agreements with specific provisions to meet 1031 qualifications.

We also discuss additional considerations for long-term leasehold interests with an emphasis that the lessee, not the lessor, holds the exchangeable interest. When all considerations are met Exchangers are able to utilize proceeds from the sale of easements and long-term leases as Relinquished Property to acquire Replacement Property in a 1031 Exchange.