1031 Exchanges from LLC and LP forms of syndication

[Buddy Holmes]

I attended a recent webinar where a syndication principal was cautioning about the 1031 exchange ability of LP and LLC entities.

He was saying the they must have a TIC form in order to conform to the 1031 rules. Specifically that the member or share holder often owns only a portion of an entity which owns Real Estate rather than actually owning Real Estate out right. Thus 1031 is only the exchange of Real Estate not shares in an entity which owes Real Estate. He seemed to say that they had a form of LP or LLC which allowed a TIC position but were able to have financing that did not bring the TIC issues into play.

Expert thoughts, please.