Title Issues for 1031 Exchange
This is a great article for real estate investors from Realty Times. Here is an excerpt from the article:
One of the basic requirements of a 1031 exchange is you have to take title to the new property in the same manner that you held title to the old property.
The IRS means the same tax identification number or social security number by "same manner." This means that if Sue owned the purple duplex she sold in her individual name, she can not have her corporation take title to her new property because she has a social security number and her corporation has its own tax identification number and files a separate tax return.
While this concept seems simple enough, it is probably one of the most problematic areas of 1031 law. The reason for many is that they own property in partnerships, corporations and limited liability companies (LLCs).
Let's say Fred owns a one-third interest in the FGH Partnership. The partnership owns a building which it is selling for $300,000. Can Fred take his share ($100,000) and exchange in a building in his name only? No -- because the partnership is the tax return that owned the old property, not Fred's individual income tax return. Only the partnership may do the exchange.
What happens if Fred's partners, George a........
we are not tax experts. for tax advice consult an attorney
Read the rest of the article here: Title Issues 1031
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