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Updated almost 6 years ago,
Cashing out a Partner
Hey all, thanks in advance for the guidance.
Here is the situation. My partner and I own a rental property in Missouri under an LLC based in Nevada. I am in California. He wants to cash out but we have a large capital gain that I do not want to realize. Our operating agreement does not spell out what to do in this scenario. Questions:
How do we account for cap gains taxes if I buy him out with a cash refi? Place his share of tax burden on him at the sale?
Should we Quit Claim the property back to us first or buy the LLC interest? The mortgage is in our names, not the LLC.
Can I sell another property and do a 1031 exchange with the proceeds to buy his share of the LLC?
Are there any real estate focused CPA's in the San Diego area that could assist me?