There are three 33% partners in an LLC and six equally distributed heirs (6). We'd like to simplify the next generation's responsibility and sell one third to one partner in a cash out deal. Two partners would remain in the LLC. There would only be board minutes and no courthouse record changes. Could the 1031 liabilities remain with the LLC and the cashed out party avoid cap gains on the old basis ($50K farm from 1950)? Could the cashed-out partner use the 2012 value as the basis for cap gains for this year's taxes? We would discount the cash out a bit considering the LLC would retain the old basis and the 1031 liabilities. We might sell another third later (would be half then, of course). Essentially, is the 1031 liability assigned to the LLC or each partner?