Moving a 1031 FROM a LLC into my personal name
All -
I took some bad advice and put the 1031 Exchange into my LLC. I am now learning the reality of that. In order to purchase another house using the 1031 funds, I will need to use a commercial loan due to the LLC. My VERY important question... can I move/transfer the 1031 into my personal name vs the LLC?
Do I have any options here? I really appreciate anyone taking the time to give me some guidance here.
Thank you all.
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- Qualified Intermediary for 1031 Exchanges
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@Lon Coleman, technically the tax payer needs to stay the same. It is possible that the LLC you have is a "disregarded entity". Sometimes an LLC will have only one member and choose to be taxed as a sole proprietor which means that it does not file it's own tax return. All of the activity of the property is still reported on your personal tax return. Since the way we communicate with the IRS is through tax returns that means that a disregarded LLC and the individual whose tax return reports the property are the same tax payer.
So technically (from the 1031 perspective) you could sell as the LLC and purchase as yourself and you are not changing the tax payer. Your scenario isn't that uncommon and for exactly same financing reason. Verify with your accountant who the true tax payer for the property is.
- Dave Foster
