1031 Exchange to property with co-owner

[Ray Jalian]

My father has a property he wants to sell and plans on doing a 1031 exchange.

I want to co-invest with him and help him buy a larger property. I would finance my portion.

A) Is this possible?

B) At what point, if at all, could he quit claim the property to me?

Thanks!

[Dave Foster]

@Ray Jalian, The portion of the property that is going to be titled to your father needs to be worth at least as much as he sells if he wants to avoid all tax.  Like @Alex Olson, the two of you would be purchasing as tenants in common - you're fathers portion needs to absorb all of his cash proceeds and equal or exceed his sales price.  You can take title to the rest of the property and use your financing for the entirety if you want (as long as his cash goes to the down payment)

At any time he can gift you his portion if that's what you mean.  Any tax from the 1031 would be accounted for in a gift return and would end up in his estate.  But as long as you both own it as tenants in common the tax will be deferred indefinitely.  And if he dies while owning it you would inherit it as a step up in basis so there would then not even be any tax to the estate.