The problem, as Brown sees it, is most proposals for federal tax reform are based on the idea of lowering overall tax rates but then eliminating a laundry list of tax credits, incentives and deductions. One that keeps popping up on that list is the 1031 exchange.

Those exchanges have long allowed people to exchange assets without incurring a large tax hit.

Section 1031 of the tax code allows the owners of business and investment property to defer payment of capital gains taxes by reinvesting all the proceeds of the sale of currently owned property into new like-kind property.

In some cases, that has meant farmers who are seeing urban areas encroach on their farm could sell that land and use the money to buy land in a different area.

Often, that farm near a city could be sold for a much higher price than land in rural areas.

The 1031 exchange has been a part of the tax code since 1921, Brown explains.

But, tax reform advocates in both political parties include elimination of the 1031 in those plans.

Brown is president of IPE 1031, a company that specializes in 1031 exchanges. He told farmers at a land investment expo this past week that 47 national, regional and state business and industry associations, including groups such as the American Farm Bureau, have spoken out against elimination of the 1031 language.

“I guess my warning would be, don’t just associate tax reform with stimulated economic growth,” Brown says. “The 1031 is a lifeblood of investment.”

He says some analysts have estimated as many as 30 percent of real estate transactions could be eliminated if the 1031 language goes away. There are multiple proposals being floated in Congress that would do so.

The proposal last year from outgoing Sen. Max Baucus, D-Mont., was to have cut the corporate tax rate but would have eliminated the 1031. Another proposal last year from Rep. Dave Camp, R-Mich., would also have done away with 1031 exchanges.

The Obama White House has suggested eliminating 1031 exchanges as part of its tax proposals and Rep. Paul Ryan, R-Wis., has proposed eliminating 1031 exchanges as part of his tax reform package.

Brown says tax reform may not pass this year or until after the next presidential election, but members of Congress are trying to lay the groundwork for long-term comprehensive tax reform.

Farmers, he says, need to make sure they are represented in that discussion and are able to stress to lawmakers what pieces of the tax code they don’t want to eliminate.