Desperate need of some 1031 Tax Exchange Ideas

[Stephen Dickey]

Hello!

My business had a recent shift of direction and strategy for our company, and it will involve us selling all four single family properties we own. I am wanting to transition into multifamily, and doing so will allow us to gain the needed capital to get involved. Here is my dilemma, and I would love some advice/feedback as the best way to go about this. From my understanding of a 1031 tax exchange, we are able to sell real estate, put the gains with an intermediary, and use the money to purchase a "like-kind" exchange of something equal or greater value, and we can defer the taxes on the sale. From there, there are other stipulations that must be followed. We have 45 days to identify properties we are interested in, then a 180 day window for closing. 

First thing, unless we get extremely lucky, we will not sell all four houses at the same time, definitely not within the time frame the IRS requires. Secondly, the four properties will all sell at different values, which will mess up the 'like-kind' situation. With that being said, we are wanting to combine our gains of all four properties into one 1031 tax exchange to put a down payment on a multifamily property. 

On paper, with the IRS stipulations, this sounds as if it will not work and we will have to shoulder the tax bill, which will cut into our available capital... Is there any way to combine these funds into one 1031 to move forward with our plan and defer taxes? Has anyone ever encountered a similar situation? If so, how did you maneuver it? Are there any loopholes I could take advantage of? If all four properties sale within one of the time periods, could we take advantage of that? Is there anything I am missing with this situation? 

I plan on contacting my attorney to get legal advice as to how to approach this, but I wanted to reach out to the community to get some advice on this situation. There maybe someone who figured out a way to make this happen.

Any thoughts/ideas/suggestions would be greatly appreciated. Thank you very much.

[Eric Sung]

I am currently gearing up to go through a 1031 exchange with my family property as well. I don't know much to be able to help, BUT one thing I would suggest is to re-look at your time frame once you sell one of your properties. You said you have 45 days to id properties then 180 day to close. I am pretty sure this is incorrect. You have 180 days TOTAL from closing on your property to close on a new one. But you must ID properties within your 1st 45 days. so its not 45 days PLUS 180s. I am almost positive its 45 days to ID, then 135 days to close for a total of 180 days.