Updated about 4 years ago on . Most recent reply
One property owned by 2 LLCs - How to setup banking?
Hello,
We are in the process of a 1031 Exchange. We are selling 2 properties that are each owned by different LLCs and will be buying a single larger property. Because of the 1031 Exchange rules, we will need to buy the new property into both LLCs. The property will be owned about 40% by one LLC and 60% by the other. How should we set up our bank account(s) for this property? We will be using the property for short term rentals. I would like to minimize the complexity and make things as simple as possible. What would you suggest? Thanks!
-Brady
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@Brandon Sturgill, It's really not a 1031 issue. You've identified correctly that the issue with 1031 is titling and tax returns. The management and funds holding is really a preference issue for the members. @Brady Stout, I'd just create a dba bank account with each LLC member as a signor. Or create a management entity that "manages the proeprty for the two LLC tenants. You could have the management entity owned by the LLCs 60/40 so that all net expenses/income are distributed appropriately. And you'd have another layer of separation from the property itself.
It's not going to affect your 1031 in any event.
- Dave Foster
