1031 with co-owned property? What is possible?

[Jackson Sandland]

I inherited a property with my brother - we're planning on selling and doing a 1031 but can we both 1031 individually? For example and for simplicity, say the property sells for $500,000 we will split the proceeds so we have $250,000 each. Can I take my $250,000 and use a 1031 to invest it in a property I will manage - and my brother takes his $250,000 and invests it in his own property? 

I've read there are limits on the number of properties you can invest in from a 1031 but I haven't verified that.

From what I've read the limit is 3 properties can be purchased via the proceeds from a 1031. If that is the case - could I invest in 3 properties and he invest in 3 properties - since we are both owners and both looking to 1031?

Thanks :)

[Bill B.]

First, most of the limits you mentioned don’t exist. But in your case that doesn’t matter. 

You don’t want to do a 1031 unless you inherited the property (and it’s a rental)  years ago. 

First, 1031’s are for investment properties so unless this was a rental you can’t do a 1031. Second, You only owe taxes on gains since you inherited, if you inherited a month or 6 months ago there are likely no taxes due. 

Third, just for reference, in case you did inherit a rental years ago, the name on the property purchased with a 1031 exchange has to match the name on the selling property. So if you and your brother are both on title you’d want to exchange in to two properties with both your names and them work on a legal and tax friendly way to get one of your names on each property after the exchange.