1031 exchange and Lease option

[Account Closed]

When You do a lease option/sanwich lease you simultaneously "buy and flip" you sell your option and let your subtenant exercise it directly from owner, right? But, if I wanted to do a 1031 exchange to buy another property with the profits.. How could I do that if im not the owner?

[Dennis Cosgrave]

The simple answer is, you can’t. In order to do a 1031 exchange, it has to be an exchange of like property. You have to own the asset you are trading. Once the properties are traded, the depreciation base is recalculated which defers the capital gains taxes but does not eliminate them.