I am selling a residential rental property and using the $ to purchase a ocean front rental condo. I have an LLC. Could the LLC buy the Condo now, and then when i sell the rental, purchase the condo from the LLC via a 1031 exchange?
You cannot purchase or sell a 1031 property to yourself no matter how title is held.
It seems like Scott may be considering a reverse 1031 exchange where he buys the replacement property (rental condo) before he sells the relinquished property (residential rental). Dave could probably provide some more details on the mechanics of that type of transaction and its requirements.
@Michael Torhan Great catch!!! I thought the condo was in the LLC. A reverse would be perfect.
@Scott Ruffrage If the condo is for sale by a3rd party and you’re wanting to lock it up before you sell your investment that’s exactly what you’d do. With one major change - the QI has to form the llc to purchase the condo. If you use your own llc you are buying from yourself. When the QI sets up the llc aka the exchange accommodating title holder it is an unrelated party to you so you can sell the investment and buy the condo.
Thanks Guys, that's what I needed to know!