Updated over 6 years ago on . Most recent reply
1031 Exchange and LLCs
I have a question regarding a 1031 exchange. I own some single family rentals and a newly aquired mobile home park. I am curious about selling one of the single family rentals and 1031 exchange to pay down the mortgage on the mobile home park. My wife and I started an LLC that owns the park. Could we start a new LLC and have it buy the park from the old LLC (simulating a new aquisition of like and real property) for the 1031 exchange? I realize you cant use 1031 exchange to pay down a mortgage on a property that you already own, but is this a loop hole?
Most Popular Reply
- Qualified Intermediary for 1031 Exchanges
- St. Petersburg, FL
- 9,527
- Votes |
- 9,194
- Posts
@Joel Hudspeth, A loophole??? Everythings a loophole with enough cash and attorney power! In order to do what you're suggesting the new LLC could not be a related party to you or your wife or your old LLC - different membership component, different TIN, different tax return, and neither of you owning more than 50% of the new LLC.
The IRS saw this one coming :)
- Dave Foster
