Transferred title to my new LLC

[Mary El]

I just moved my SFRs out of my name and into individual LLCs. For one property I want to do a 1031 exchange. Does my LLC have to hold the property for 366 days before I can do an exchange? I've own the property for 27 months.

Also, I lived in the townhouse as my primary residence for the 5 months. Does that create a problem for doing a 1031 exchange?

Timeline for clarity...

Bought townhome: Jan 2018

Made primary residence: July 2018

Moved out & rented it: Feb 2019

Transferred title to LLC (no tenant change): Jan 2020

Thanks in advance!

[Dave Foster]

@Mary El, The primary time is probably not an issue. The transfer of entity might not cause you issue either if the LLC is a disregarded entity. While the property was in your name it was probably reported on your personal tax return Schedule E. If the LLC you set up is a single member LLC and has elected to be taxed as a sole proprietor then the LLC will not file it's own tax return. And the activity of the property will continue to be reported on your personal tax return Schedule E.

Since you're not changing the tax payer It would be perfectly fine to do a 1031 in that case.

IF the LLC has multiple members or is being taxed as a partnership then it is a different tax payer and you may have issues if you do a 1031 too quickly after placing the property into the LLC. It all depends.