1031 to a Spec Home from our company

[Amelia Gull]

Hello,

I'm new to this community, and value the knowledge base here! My husband and I own 2 rental properties (1 has been rented for 10+ years, and the other for 1+ year). The newer property just isn't cash-flowing the way we'd like it to be, so I'm looking into the viability of a 1031. The properties are owned under our personal names. 

My husband is also a builder, and he is building a series of spec homes that have more bedrooms and would rent for more (fixing the cash-flow problem). If we built one of these spec homes (owned as our company), and then did a 1031 exchange under our personal names, is that viable because the parties are two separate tax entities? We are an LLC, taxed as S-corp, with K-1s. We asked our current CPA, and he's not completely sure since it's a pass-through tax situation. Tried calling the local CPA's that are "experts" at 1031s, but they aren't responding because it's busy tax season...I'll dig in deeper with tax people if it's a possibility, but wanted to throw it out there to this community first.

Any insights are much appreciated!

[Wayne Brooks]

@Amelia Gull @Dave Foster can answer about any non arms length issues…he’s our expert.