1031 and Land Trusts ?

[G Marks]

Hi all,

Looking for input regarding 1031's and Land Trusts. For those not in the know or not familiar with Land Trusts, it is a Trust in which a property is titled to a Trust name ( ie 123 Main St. Land Trust ) and has a trustee named on title as well; Normally a person (not yourself) or an LLC (which may or may not be yours). The trustee acts directly on behalf and solely for the beneficial interest of the Trust. The beneficial interest (BI) of the Land Trust is normally yourself or your LLC/Co. So therefore, the BI is the sole owner of the property. These are done usually for anonymity purposes but may have underlying reasons.

Question is, does anyone have experience doing 1031's out of a Land Trust and purchasing another property(ies). Being that my LLC is the beneficial interest of the Land Trust, and that all taxes, expenses and tax reporting was via the LLC, I would believe that I could just sell the property in the Land Trust and purchase another either in another Land Trust (different name) as long as the LLC was the BI. Or I could just put the new property(ies) directly in the name of the LLC.

I have read documents on this where the IRS has taken the stance that as long as the LLC (BI) has direct involvement and directs the trustee, then in all intends is the direct owner, therefore 1031 is allowed. Need to find out if it needs to be a single member disregarded entity or not. I can look up the ruling reference and post also.

Does anyone have any direct experience doing this or any insight. Thanks