Can 1031 be done from LLC with partner to a personal purchase?

Question

I have a unit for sale that belongs to an LLC that I have 50-50 interest in. I would like to take my proceeds from the sale and purchase a property to be owned exclusively by myself and do it using a 1031 exchange. Can I do this as a 1031 exchange if I am selling in the name of the LLC and with 50% of the proceeds purchasing in my own name?

Dave Foster · Answer

@Steve Parkhurst, Nope, The LLC is the taxpayer for the property you own now. It must be the entity that does the 1031 exchange. It must sell and buy the replacement properties.

Now, if you and your partner were to both have properties you wanted to own in your own name the LLC could sell and then 1031 and buy the replacement properties and after the 1031 is complete you could work with your accountant to dissolve the LLC and distribute the properties to each of you individually. Or it could just buy the one and then distribute the remaining cash (and tax bill) to your partner.

But initially the LLC is going to have to sell and then buy.

Can 1031 be done from LLC with partner to a personal purchase?

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