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Updated over 3 years ago,
1031 exchange with partnerships
Hello, I have a confusing situation regarding 1031's, and if anyone can provide some insight I would really appreciate it. Two of my relatives were partners on a duplex, and I bought one side of the duplex from them while we were selling a primary residence and looking for another house to buy(I'll call it unit 1). This property was converted to a rental, and about a year later I bought one of the partner's ownership interest in the other half (unit 2), they were ready to start retiring from real estate. One of the partners remained invested. the tenant in unit 1 has offered to buy both sides and we have agreed to sell. These same 2 relatives also co-own another similar piece of rental property, and I am considering buying one of the partner's ownership interest in the property (unit 3). As they are all similar properties we have valued units 2 and 3 equal to each other. There is no debt on unit 2, and we could use all the funds from the sale to purchase unit 3 for cash. would this type of transaction qualify for a 1031 exchange? I know I will pay cap gains and recapture on the side I own by myself, my concern is with the other property that I own in partnership.