Small Business Sale to Investment Property

General Real Estate Investing
5yFollow

Small Business Sale to Investment Property

Ray Martinez
Investor · Los Angeles CA, USA · Member since 2020 · 28 posts · 0 votes

Selling small business corporation and would like to 1031 exchange for rental property. Is this possible?

0Reply
16 views

2 Replies

Jump to latestLatest
  • Bill ExeterBusiness Member
    1031 Exchange Qualified Intermediary · San Diego, CA · Member since 2008 · 1k+ posts · 1k+ votes
    5y

    Hi @Ray Martinez ,

    The sale of a corporation does not qualify as a sale of real estate so a 1031 Exchange would not qualify here.

    Exeter 1031 Exchange Services, LLC and Exeter Trust Company4.826 Reviews
    WebsiteView Page
    0Reply
  • Dave FosterBusiness Member
    Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
    5y

    @Ray Martinez if your business contains a real estate component then you can exchange the portion of the sale allocated to the real estate for new investment real estate.  But the FFE and good will components you cannot exchange.  This is where you and your negotiation team earn your pay.  You will want the allocations of the real estate to be as high as possible so you can 1031 more.  The opposite side will probably want a high allocation to FFE so they can depreciate more quickly.

    The 1031 Investor5140 Reviews
    WebsiteView Page
    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free