1031 Exchange from residential to commercial/residential

[Camy Kwok]

I have lots of questions that hopefully I can get some guidance on!

My mother has a rental property she has held for about 15 years in Washington state and has rented it out for the first 12 of those years. Because the condition of the building has deteriorated requiring substantial renovation she decided to stop renting it out after the last tenant moved 2-3 years ago. We have developers interested in buying the property for about 6 million. With that money we would like to do a 1031 exchange to continue growing her portfolio. Should she do that under a LLC or a trust if she intends to pass those properties to my sister and I should something happen to her? If we have multiple properties, do the properties need to be held under separate LLCs or can they be under 1 LLC? Can she hold properties in both Nevada and Washington state?

My sister and I have a business that we are looking to expand into another location. Could my mother exchange for a commercial property and we pay rent to her? Can we rent a residential property from her? We will of course pay fair market rates.

Thank you!