1031 with a change of title

2 Replies

I am the sole proprietor of single-family used as a rental soon to close. The sale price will be 300K and profit of 200K. I would like to relinquish the property replacing it with multiple properties bought with a friend.

Is it possible to have a title change with a 1031 exchange? No LLC, just TIC with appropriate ownership %. Is it true that the new ownership can change as far as teh transaction maintains the tax identity; the TIC with % ownership allows this.

To maximize the tax advantage I understand my ownership part should be at least 300K. What is the minimum down payment (equity) I need to own from the start? Is it the equity=200K and the rest of my ownership could be through a mortgage?

thank you

@Joe Rest , The tax payer has to stay the same from old to new. And in your case going from wholely owned to partly owned (tic structure) will not change the reporting. The TIC new properties will still be reported on your tax return. So the tax payer is staying the same - no problem.

As far as reinvestment requirements you must purchase at least as much a you sell (300K minus closing costs) and use all of the proceeds ($200K ish ??).  There is no minimum down payment required and you can allocate those proceeds in any way you want as long as at the end of the day you've purchased at least 300K (your share) of real estate and used all 200K of proceeds in those purchases.

thank you for your competent answer. 

I am glad you as a professional confirmed that it is possible. You can not believe how many incorrect answers you find with a google search on this subject..