1031 Exchange - can I purchase a seller's LLC?

[Matt Kvalheim]

I recently sold a 4 plex that was held in my name and I want to 1031 exchange into a small apartment complex, which I have under contract. The apartment complex is held in an LLC, single member. Rather than purchase the apartment complex outright, I would prefer to purchase the ownership interest in the LLC. Please correct my assumption if this is wrong, but my understanding is that the county tax assessor would see a real estate purchase/sale and would be able to reassess the taxes on it. However, if I purchase the LLC, I am buying a business that includes the real estate and it is less likely that the tax assessor would be aware of the transfer and new sales price.

So I have two questions – is my understanding of this correct? If so, would this kind of transaction qualify for a 1031 exchange? I am not sure if a single member LLC can be purchased or if it is dissolved when sold. Maybe I could create a new LLC and transfer the asset from the LLC I am purchasing into my new LLC at the closing table?