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Updated over 5 years ago,

User Stats

42
Posts
17
Votes
Hailey Brown
17
Votes |
42
Posts

Complex 1031 company mistake

Hailey Brown
Posted

Hi all - I have a question that is most likely for tax specialist's and attorneys, but I thought I would see if anyone here has any insight. 

I sold a property with a partner and we put the money into a 1031 and bought two additional properties. The 1031 company only transferred my name onto the new properties and not my partner (we should have caught this but we didn't until it was already done). Its basically like she just disappeared off all of the documents. My partner is a good friend of mine and so we just assumed it was fine and that we would work it out through a side contract or something like that (probably not the smartest idea - rookies here). But, now that taxes have come around, because the 1031 was never put in her name, she is getting taxed for the capital gains on her portion, which defeats the whole purpose of the 1031. I have a few questions:

1. Is it possible to have the 1031 exchange company/title company fix this? 

2. Will this make the 1031 invalid for me? 

3. IF we were able to get her back on the paperwork, would it affect the loan I have?

4. Another option is to buy my partner out if we cannot get her name back on the documents, doing this would I eventually pay capital gains on her original profit from the first sale? even though she is being taxed on it now? 

Any insight or pointers in the right direction would be greatly appreciated! Thank you in advance. 


Hailey

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