I own a property with a partner in LLC. We both are 50% partners in it. We are selling the property now and I want to know that the proceeds from the sale can be invested separately or we have to buy next property together. what is the procedure to do this? Please advise.
@Dave Foster can give you the answer.
Thanks @John Thedford , It sounds like that LLC you have is a regarded entity @Raman Singh . that's just tax talk meaning the LLC files a tax return and you get a partnership form that you use to file your tax return.
If so then the LLC is the taxpayer for the property and it will have to do the exchange and sell and purchase the new property. That's no problem if you guys don't mind staying together in the LLC.
If you want to separate without paying taxes then you'll need to sell the property as the LLC and do the exchange. Then after the exchange is complete you can dissolve the LLC and distribute the new property or cash to the partners. Done correctly this does not create a taxable event and the two of you can go your own ways at that point.
I use local ipx1031 to coordinate all tasks. The fee is $850 on selling and free on purchase. My CPA for cost basis. Listed the property on Sunday into contract(cash) on Thur and SAT into contract on purchase. Done in 6 days.
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