1031 potential when exiting partnership

[Jennifer Knestrick]

I own a partial interest in an LLC that owns/operates a mobile home park. My mother owns another, larger interest. I'm hoping we can sell our interests, so this partial ownership doesn't end up in her estate, and then my brother and I have to deal with it at an arbitrary time.

She’s very concerned about the tax liability of selling her share, and wants to 1031 exchange when exiting the partnership. But is this an option? What are the like-kind requirements with something like this?

I wouldn't mind just paying taxes on my interest. We'd be selling to a third partner, who would then own 93% of the LLC.

Can anyone explain or suggest a reading list to learn about the applicable tax law?

Thanks!

[Dave Foster]

@Jennifer Knestrick unfortunately you can only exchange actual real estate in a 1031.  You cannot exchange personal property or a membership interest in an entity that owns real estate.  

If the LLC were selling the park then the LLC could do an exchange on the sale and it could use 1031 to then purchase replacement real estate. But the individual members cannot exchange their interests by themselves.