1031 personal to llc

[Kevin Nguyen]

hello all , I have question tthats I has a rental house in Vegas in my name , but I will soon sell it and 1031 to bigger property in texas. The question is how can I change it to llc and still be able do 1031 ? Thanks

[Bill Exeter]

Generally, the taxpayer (person or entity) that buys the replacement property must be the same taxpayer that sold the relinquished property. However, there are exceptions. In your case, if you sell as an individual and want to acquire the replacement property in a limited liability company ("LLC"), it would qualify IF the limited liability company is a single member LLC and you are the single member. A single member LLC is considered to be a "disregarded entity" for tax purposes, which means they ignore the entity for tax purposes and treat the property as if it was purchased by you as an individual. It must be considered a disregarded entity in order to qualify.