Multiple family members with an undivided interest in land

[BP MN]

My grandmother passed last year and left farm land to a number of family members which is expected to be developed within the next 5 - 10 years. The land is owned in an undivided interest across five family members and in various percentages. The family is trying to decide the best course of action when the time comes to sell the land to developers.

A cash sale would be convenient in terms of cutting the financial ties between family members but it also creates a very large tax liability.

Is a 1031 possible/feasible? I assume the family as a group could exchange the land for something like an apartment complex as tenants in common? This solves the tax liability issue but keeps the family members connected at the hip financially. I get the sense that most members would like to divide their interests'.

Is there a way to sever the financial ties? Would each family member have to find a property that roughly corresponds to his or her ownership interest? In which case we would be looking at (at least) a 1-5 property scenario?

At some point we are planning on talking to a CPA or attorney but I wanted to try and get a better understanding of the situation first.

[Bill Exeter]

Yes, the 1031 Exchange is feasible, and the interests could be severed with proper planning.

It sounds like the estate has already been settled and each individual has received an undivided interest in the real property (via recorded deed). This means that each individual could decide whether they wish to cash out or do their own individual 1031 Exchange, some of them could exchange together, or the entire family could exchange together. They do have options since the property interests are held as undivided interests.