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[Gene GeRue <genegerue AT ruralize.com>]

> Say Gene, could you go over some of the particulars about how to save
> getting taxed on the sale of property.  My wife recently inherited a lot
> in Illinois worth about $40,000. We would like to take that money and
> invest in property on a creek/river in Missouri.

Clint, the tax-free profit is on the sale of a personal home in which you 
have resided for two of the last five years.

To do a 1031 tax-deferred exchange, you have to exchange like property, for 
instance investment property for investment property. You might be able to 
exchange the lot for land but your wife may be liable for inheritance tax 
anyway. To do a 1031 you have to get a sale on the lot with contract 
language where the buyer agrees to cooperate with a 1031 exchange. Then you 
have 45 days to identify the property you will buy. You have 180 days from 
date of sale to close the exchange. The sale money has to be held by a 
qualified intermediary, who will charge a fee.