1031 into a franchise?

[Mary El]

Can I sell a rental property and buy a franchise business?

[Whitney Nash]

Hello @Mary El

No, you cannot 1031 into the actual business itself. But @Chris Picciurro is right, if "real property", such as the building itself, is part of the purchase of the business, then you can use 1031 funds for that part of the purchase because it will satisfy the "...or use in a trade or business" requirement. If no real property exists as part of the purchase, such as with an online-only business, then no can do.