1031 question co-ownership

2 Replies

Co own two properties with sister. We plan to sell one unit at the next vacancy. Can I do a 1031 exchange and buy her out of the second unit with the proceeds received. These are identical properties (condos) same pricing

@Fred Cannon , If you're both on the deed then you can certainly 1031 your portion anywhere you want.  the potential issue with you is that this is a related party.  And the iRS has made it very clear that they are suspicious transactions where the exchanger is buying from a related party.  It's not that it is statutorily prohibited.  But they almost always will disallow an exchange where they see this because it is seen as a form of basis shifting (which it is).  But that being said, there are many accountants out there who will let you do it as long as it is very tightly documented as an arms length business like transaction.

America's Private Lender
Receive Fix and Flip Funding Approval In As Little As 24 Hours!
Sharestates helps developers and brokers secure funding quickly with the most competitive terms.
Get Funded

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you