Can you use different names on the titles using a 1031

[Tricia Plank]

Can I use a 1031 exchange to sell property in "my name", put the funds with a QI who then purchases new property in the name of an LLC I form with someone else? I believe the answer is no because there would be different taxpayers on the title but any thoughts?

[Joe Vesey]

No, the taxpayer needs to remain consistent "how you sell is how you have to buy."

[Tricia Plank]

Thanks.

[Dave Foster]

@Tricia Plank, exactly right. a 2 member LLC has to be treated as a partnership and file it's own tax return. It is a separate taxpayer. Selling as yourself and buying as that multi-member LLC is changing taxpayers.

If you wanted to purchase as a single member LLC that elects to be taxed as a sole proprietor. then that LLC will not file it's own tax return. And you would still be the taxpayer. The property will not change tax returns. After the fact you can work with your accountant to add the second member to the LLC.

[Bill B.]

Otherwise you would be giving you “partner” 1/2 your equity and 1/2 your deferred tax liability. 

It would be just as easy for your LLC to buy a portion of the new property and your partner to buy a portion of the new property as tenants in common. A long as you purchased more than you sold.

[Ashish Acharya]

In a 1031 exchange, the same taxpayer who sells the property must be the one who buys the replacement property. If the original property is in your name, the new property must also be in your name to qualify. Purchasing the replacement property through an LLC with someone else would likely disqualify the exchange because the taxpayer on the title would be different.