1031 Exchange question

[Robin Cornacchio]

Can you use a 1031 exchange on a SDIRA owned investment property? 

[Dmitriy Fomichenko]

Quote from @Robin Cornacchio:

Can you use a 1031 exchange on a SDIRA owned investment property? 

Robin, IRA is a tax-deferred vehicle. When you sell a property owned by the IRA - this is not a taxable event. Therefore, you don't need to use a 1031 exchange; you can take as long as you wish to find and then buy another property.

The only exception is if there is debt on a property, in which case there will be some UBIT (Unrelated Business Income Tax) implications. This tax is assessed on income derived from the leveraged portion of the real estate owned by the IRA, and also applies on the sale of leveraged property in an IRA. Note that a truly self-directed Solo 401k would be exempt from UBIT on leveraged real estate. 

Hope this helps!