Apartment Building Syndications and 1031 Exchanges

[John Jacobs]

I have been a Limited Partner (LP) on several apartment building syndications.  I have been told that as a LP that I cannot participate in a 1031 Exchange when that apartment building is sold.  I was wondering does the same apply to General Partners (GPs) or can GPs participate in 1031 Exchanges?

[Dave Foster]

@John Jacobs, As the GP calling the shots it can be done if your financing will allow.  The key is that the 1031 has to be a sale and purchase of actual real estate and not an interest in the entity that owns the real estate.  So you would need to structure the syndication with a % of the property being inside the entity and the domain of your regular limited partners.  And a % of the real estate held as actual real estate to be sold to 1031 investors as tenants in common or purchased by you as the second half of a 1031 exchange and then used in conjunction with the Partnership