1031 exchange into a partnership

[Eric Bilderback]

Can an individual 1031 from the sale of a building into another building with a partner?  I don't see why not but my client thought adding a partner to his next transaction would ruin his 1031 status.

Thanks for the helping out

[Jacqueline Gardiner]

@Eric Bilderback I'm sure one of the pros will chime in, but I spoke to @Dave Foster about an arrangement such as this a week ago. He said that there were a couple of ways that this could be done, but the exchange itself will have to be done by the individual since that's how he currently holds title. He could then set up an LLC, move the asset into the LLC, have the partner put in his portion of the $$, establish at that time who owns what %, and set up the operating agreement. Another option he mentioned was to set up a tenant-in-common structure (TIC) and each partner would buy the proportional share of the new property (with your client doing an exchange for his share).