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1031 Exchange new LLC for new property
Hello,
Today I closed on the sale of my apartment building. It was held in LLC "A". The funds will be held by 1031 Exchange intermediary.
Do I have to buy the new property under same LLC "A" or can I form a new LLC "B" to hold the new purchase.
LLC "A" is a single member LLC.
I appreciate the response.
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- Qualified Intermediary for 1031 Exchanges
- St. Petersburg, FL
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@Davit Gharibyan, The QI for your 1031 will have the final word. Hopefully they addressed entity with you ahead of time. Because it could make a difference. It's not enough that LLC A be a single member LLC. It also must have elected to file taxes as a sole proprietor. This means it does not file it's own tax return. Activity of the property is reported on your personal tax return. If so it is a disregarded entity and you could sell as that LLC and buy as yourself or LLC A or LLC B as long as LLC B is also a disregarded entity to you. And if LLC A is regarded you could still purchase as LLC B as long as LLC B was disregarded to LLC A.
Don't forget that you'll also need to consider states wishes if you are moving your property to a different states. Most will require at the least that you domesticate your LLC or even form a new one in the state you're going to.
- Dave Foster
