1031 Question- into self owned LLC?

Allentown, Pennsylvania
1031 Exchanges
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1031 Question- into self owned LLC?

Matthew MorrowBusiness Member
Investor · PA - NY - NJ · Member since 2019 · 458 posts · 168 votes

We have a client who is looking to sell one of his properties that is in his personal name, and use the proceeds to buy out his existing ownership share in a multi unit he owns. I don't believe 1031 guidance would allow you to exchange into a entity or other asset that you own personally either outright, or as a member of the ownership LLC.
I’ve  already reached out to our contact in the industry, waiting on some feedback. Anyone have any experience with similar situation? 

[email protected]484-791-6200
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  • Dave FosterBusiness Member
    Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
    3y

    @Matthew Morrow, You're right. First of all, they can't buy from themselves in a 1031. If the LLC is a single member and doesn't file a tax return then they and the LLC are the same taxpayer.

    Second, they must purchase actual real estate and not an interest in an entity that owns real estate. Buying the interests of the LLC would not be purchasing actual real estate even if it was a regarded entity.

    The 1031 Investor5137 Reviews
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  • Matthew MorrowBusiness Member
    OP
    Investor · PA - NY - NJ · Member since 2019 · 458 posts · 168 votes
    3y

    Thanks @Dave Foster. Didnt think this one would be possible but wanted to check. Appreciate you!

    [email protected]484-791-6200
    CORE Team | Realty ONE Group Supreme547 Reviews
    WebsiteView Page
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