1031 Exchange new LLC for new property

[Davit Gharibyan]

Hello, 

Today I closed on the sale of my apartment building. It was held in LLC "A". The funds will be held by 1031 Exchange intermediary.

Do I have to buy the new property under same LLC "A" or can I form a new LLC "B" to hold the new purchase.

LLC "A" is a single member LLC.

I appreciate the response. 

[Dave Foster]

@Davit Gharibyan, The QI for your 1031 will have the final word. Hopefully they addressed entity with you ahead of time. Because it could make a difference. It's not enough that LLC A be a single member LLC. It also must have elected to file taxes as a sole proprietor. This means it does not file it's own tax return. Activity of the property is reported on your personal tax return. If so it is a disregarded entity and you could sell as that LLC and buy as yourself or LLC A or LLC B as long as LLC B is also a disregarded entity to you. And if LLC A is regarded you could still purchase as LLC B as long as LLC B was disregarded to LLC A.

Don't forget that you'll also need to consider states wishes if you are moving your property to a different states. Most will require at the least that you domesticate your LLC or even form a new one in the state you're going to.