1031 Exchange when have plan to close the LLC

[Adam Binder]

Hello - I'm new to posting to BiggerPockets, so please let me know if this should be posted to a different area.

We moved to TN, and have decided to close our LLC in Michigan. The last property under the Mi LLC will be sold in 10 days. We would like to do a 1031 exchange. But, what are the ramifications to consider if we eventually plan to close the Mi LLC? Specially, we will get a commercial loan for the new purchase in TN.

Thanks for any suggestions!   

[Frank Chin]

Generally speaking the seller and buyer have to be the same entity. See: 1031 Rules

However, as mentioned, you have to be especially careful with disregard entities and how you file the tax returns. You mentioned "we" and it seems a spouse is involved, so it is not owned by a single person, though in some cases married people is considered a single entity, such as in lawsuits involving piercing the corporate veil.

To play it safe, suggest you keep the old entity until the 1031 is completed, unless you have this entity issued completely resolved by experts.