There are many intricacies surrounding 1031 exchanges involving married couples. What happens with married taxpayers where only one spouse owned the Relinquished Property? Can both spouses take title to the new Replacement Property?
The short answer is no. If only one spouse held title to the old Relinquished Property…can both spouses take title to the new Replacement Property together? If the only funds being used to purchase the new Replacement Property are the proceeds from the disposition of the old Relinquished Property, then title to the new Replacement Property should be taken solely by the spouse that held title to the old Relinquished Property. In non-community property states where the non-titled spouse has no actual ownership interest (only an inchoate or potential marital interest) in the sold Relinquished Property, the best plan is to have the exchange completed by the spouse that actually owned the Relinquished Property.
Minnesota Property Rights
Minnesota Statute 519.02 PROPERTY RIGHTS. All property, real, personal, and mixed, and all choses in action, owned by any woman at the time of her marriage, shall continue to be her separate property, notwithstanding such marriage; and any married woman, during coverture, may receive, acquire, and enjoy property of every description, and the rents, issues, and profits thereof, and all avails of her contracts and industry, free from the control of her husband, and from any liability on account of his debts, as fully as if she were unmarried.
CPEC1031, LLC
CPEC1031, LLC has many years of experience facilitating successful 1031 exchanges. Our qualified intermediaries can help you navigate the rough waters of the exchange process. We can help you identify your replacement property, prepare your documents for closing, and answer all of your questions. You can find us at our office in Minneapolis. That said, we also work with clients throughout the state of Minnesota and across the United States.
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
Defer the tax. Maximize your gain.
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