It’s important to remember that 1031 exchanges are limited to solely real estate. It’s also important to remember that partnership interests are excluded from 1031 treatment as is the good will or going concern of a business.
However, there is a situation in which you can buy an interest in a business and have it qualify for 1031 exchange treatment. That’s when you buy out and consolidate to receive 100% of an entity. Let’s say you’re in a partnership with another individual and you buy out all of that individual’s interest in the partnership, consolidating 100% of the entity in your own capacity – making it a sole-proprietorship. In doing so, you’re deemed to have purchased out the underlying real estate that’s allocable to that other person’s interest in the entity. This comes from revenue rule 99-6. It’s a great way to buy out and consolidate and LLC in one person’s name. It’s also a great way to use up your 1031 exchange funds to buy up a property that you’re already familiar with.
Get Started with the 1031 Exchange Process
Begin your 1031 exchange today by contacting a qualified intermediary at CPEC1031, LLC. With over twenty years of experience, we are well-suited to handle all of the details surrounding your 1031 exchange of investment real estate. We’ve helped many taxpayers throughout the United States with their like-kind exchanges and we can help you with yours. Contact us today to learn more about our numerous service offerings and see how we can help you with your next 1031 exchange. Our team can help you with any type of exchange in any locale throughout the country.
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
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