Can a 1031 Exchange be applied to the sale of two properties in an effort to purchase one of greater value?

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I am looking to purchase a commercial, multi-family property with some co-investors in the latter part of 2021 under a joint-owned LLC, for which my portion of funds would come from the sale of two of my properties (one under my name and another under an LLC solely under my name). With that said, would I be eligible to sell two properties to acquire one property of greater value and avoid capital gains taxes on both of those sold properties? Or can you only apply the 1031 designation to one property in an effort to purchase another? Also, is a 1031 feasible if multiple people are involved in a purchase where one person’s funds comes from the sale of a property but everyone else’s comes from non-real estate sales sources? Finally, if a sold asset is under an individual’s name but the acquisition is being done under an LLC that is owned partially by an LLC that is solely under the name of that individual, is a 1031 still permitted? For example, Person A owns XYZ LLC which owns 50% of DEF LLC, and A sells a personal asset to purchase part of the new asset that’s owned under DEF LLC.

Attorney Answers

2
Steven Clausen ·
You have a complex fact pattern for which you need to hire an attorney who is experienced in 1031 exchanges.
0 upvotes
Stuart Lautin ·
Agree with Mr. Clausen. IRC 1031 / 1033 / 1035 laws are strictly enforced. Miss one deadline, fail to properly send notices, fail to properly designate a Qualified Intermediary, remove funds prematurely, or exercise an element of control over such funds, and similar actions all result in a busted 1031 and there will be no tax deferral and ultimate step up in basis to heirs and beneficiaries. Suggest you contact a CPA for guidance or a lawyer in a Firm that provides this level of tax expertise.
0 upvotes