The range of types of real property which can be exchanged under IRC Section 1031 as qualifying “like kind exchange” property is extremely broad. Any real property held for productive use in a trade or business or for investment – whether improved or unimproved – can be considered a “like kind exchange.”
It is important to look to the treatment of water rights under the applicable state laws. In many states, however, water rights are treated as real property and should generally qualify for an exchange of other like-kind real property for IRC Section 1031 purposes.
To learn more about water right and water right title insurance, contact Stewart Water Information, LLC (888) 353-6760 or www.stewartwater.com