When selling property owned by an LLC or partnership, you have a couple of options. One such option is the “drop and swap” in which you take all the former partners and redeem them out of the partnership with a liquidating distribution by giving them a deed to their proportionate share of the underlying real estate. Then when the sale takes place, you’ll have multiple co-sellers, each selling their own fractional interest in the real estate. Each co-seller can take their proportionate share of the proceeds and potentially do a 1031 exchange or take the money and pay the taxes. The important thing is that they’re not conjoined under the banner of an entity any longer because you’ve distributed the real estate out of the entity.
Find a Qualified Intermediary Near You
Contact a qualified intermediary near you to start your 1031 exchange today and start deferring capital gains taxes when selling investment real estate. Section 1031 is a powerful provision that’s been built into the tax code. Any US taxpayer can use it to defer capital gains taxes on the sale of investment or business real estate. Reach out to a qualified intermediary at CPEC1031, LLC today to learn more about the 1031 exchange process and get started with your next exchange. You can find us at our Twin Cities office located 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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