1031 and trust

1031 and trust

Member since 2018 · 52 posts · 16 votes

I have  a peculiar situation. Me and my husband have a trust and so far we have put all our assets including homes under this trust. 

We have a property outside this trust that is only on my husband's name (we couldn't buy it on both of our name due to my unavailability at the time). Now we are selling this property and buying new one under 1031. I have a couple of questions below. 

1. Do we have to buy the new property on my Husband's name or can it be bought on both of our names?

2. If the new property has to be bought only on my husband's name, can we add it to the trust after the 1031 exchange is done? If yes, is there a wait period before adding the property under trust.

3. If the new property cannot be added to trust immediately, how do we ensure that me and my child is the beneficiary on the property in the meantime? is there a way during the purchase process where beneficiaries can be added?

Thanks, 

Ana

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  • Pasadena, CA · Member since 2019 · 136 posts · 148 votes
    2y

    @Ana Vhan - The IRS needs to see the same *taxpayer* on both sides of the exchange.

    If you file jointly, and your trust is disregarded, you should be able to take title in the name of the trust.

    Your tax professional can confirm, and your QI can support that decision.

  • Dave FosterBusiness Member
    Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
    2y

    @Ana Vhan, exactly what @Jon Taylor said.  If you file a joint tax return you are considered the same tax-payer.  You can sell as your husband and buy as both of you.

    If your trust does not file its own tax return then activity of the properties in the trust is reported on your joint tax return.  So again you are seen as the tax-payers together.  In this event, you could sell as your husband and buy as both of you or as the trust.

    The 1031 Investor5137 Reviews
  • Member since 2018 · 52 posts · 16 votes
    2y

    Thank you so much Jon and Dave for your responses. Appreciate your help. 

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