1031 exchanges with LLC

[Karen Tan]

We converted a second home in FL to a LTR but have not changed ownership to our LLC. There's quite a bit of gains and the plan is to 1031 exchange the property, which we've never done before, after two or more years of rental. Will 1031 exchanging the property owned by our LLC prevent us from being able to lend under our own name vs the LLC's? If the LLC owns the property, and later pursue a 1031 exchange, will the new loan have to be taken by the LLC?

[Dave Foster]

Thanks for those kind words @Bill B..  Looking forward to the next one.  @Karen Tan you can 1031 exchange regardless of who owns the property. If you are contributing the property into a single member LLC that doesn't file a tax return. Or a multi member LLC that you and your husband are the only members of then you're on good footing regardless as the contribution into an LLC is not considered a taxable event.

If you convert into the LLC before your sale then yes, you will probably have to get a loan in the name of the LLC. And sometimes lending is more advantageous when you can do it in your name. Especially if your LLC is young and unseasoned