Many people think that, in a 1031 exchange, you need to use the exact entity for both the relinquished property and the replacement property. However, that’s not always the case.
The bottom line is that the same taxpayer needs to be the one selling and purchasing all property in a 1031 exchange. That said, the properties do not have to be titled identically. It could be the taxpayer acting between and through a trust or LLC or something else.
Every US taxpayer is an individual with a social security number. If you want to buy property in your revocable trust, that’s probably considered you as well because revokable trusts are not separate and distinct taxpayers. If you want to buy property in your own single-member LLC that’s disregarded for tax purposes (everything rolls up to your schedule E on your personal tax return), that’s still considered you for 1031 exchange purposes.
Qualified Intermediaries who can Help with Your Like-Kind Exchange
At CPEC1031, LLC our qualified intermediaries can help set up and execute your like-kind exchange of real estate. We have more than twenty years of experience assisting taxpayers across the country with real estate exchanges under section 1031 of the Internal Revenue Code. Let our team of professionals help you through all the details of your next like-kind exchange of investment real estate. Contact us today at our Minneapolis office to learn more about the benefits of the 1031 exchange and see if your property is a good fit for a like-kind exchange.
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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