1031 title and LLC question

3 Replies

Hi BP,

I know asking a tax question in forums will get a lot of speculation and I am in the process of asking tax individuals, but has anyone dealt with a 1031 exchange that once completed, you moved it to a LLC that's in your name only? If so how many days, weeks, months did you wait to do so? I'm not concerned about the lender calling the loan due by moving a loan into a llc, I just want to know if the IRS requires you to wait any amount of time for title to vest in your name before sending to the llc.

After that question, the follow up would be, once I have it in the llc with me on the llc only, does the IRS require me to wait any amount of time before adding my wife to that llc, giving her 50% ownership?

I'm really just interested if the IRS has time frames for either of the above scenario's.  Any advice would be helpful.

Thanks, Greg

I think it's OK to do whatever you want after the 1031 is completed. It's gets tricky if you try to do before the exchange. 

@Greg Junge , We've seen just a few of these (like bunches).  @Soh Tanaka is exactly right.  You never want to change entities right before closing.  That will set off all kinds of alarms in an audit.

Once you've completed your 1031 you are simply placing the property into a an entity, probably for liability purposes. This is done quite frequently. And if the LLC you set up is a disregarded entity (meaning taxed as a sole proprietor and not filing it's own tax return) then all activity of the property is still on your personal tax return. So you remain the tax payer for the property anyway.

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