We get a lot of questions about 1031 exchanges involving partnership or LLC interests. Is it possible to buy out a partnership or LLC interest to complete a 1031 exchange? That’s our topic for this article.
Partnership & LLC Interests
Normally partnership or LLC interests (or interests in other business entities such as corporations) are not considered like-kind to real estate for the purposes of completing a 1031 tax-deferred exchange.
However, Private Letter Ruling No. 2008-07005 (PLR 200807005) says that receipt of 100% of a partnership, consolidating ownership in one taxpayer is the same as an acquisition of a "disregarded entity" and as such would be treated as an acquisition of the underlying real property interest for 1031 exchange purposes.
CPEC1031
It’s always a good idea to discuss these situations with an experienced qualified intermediary who can walk you through the process to ensure success. At CPEC1031, LLC, we have been providing 1031 exchange services for the past twenty years. Let us help you defer taxes when selling real estate. You can find us at our main offices in downtown Minneapolis.
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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