1031 Exchange - Residential to Commercial
So, here's a question I have been trying to find an answer to for a few weeks now:
I know a gentleman that wants to sell his residential investment property and use a 1031 exchange to purchase a commercial property with two other partners. After purchasing the property, he and the partners will use the building for their businesses while renting office space to other tenants as well.
1 - Is this a qualified transaction for a 1031 exchange?
2 - If it is not, what could/would make it a qualified transaction?
I don't know if 1031 exchanges are normally complicated, but I have had no success in finding any answers to the question. The best answer I've had so far is, "uhh...maybe."
Do you guys and gals have any insights or wisdom?