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Partnership Buyout or 1031
I'm working with a friend to explore a partnership/JV with 3rd investor who is a personal friend of his. The deals we're looking at are new development small apartment type projects (8-15 unit infill), and we're trying to establish a couple exit strategies on these. One would be we all continue to hold, another is we decide to sell and take our equity and the final option is that we want to buy out the third partner who is largely the 'money' guy.
So with that third option of a buyout if we were to want to buy out the third partner is there a specific structure that would be more tax advantageous? Ideally buying out the third partner's interest would not trigger a 'sale' and a change in the basis for the remaining two partners.
Would there be a structure that would lend itself to a 1031 for our third partner (TIC)?
We will be getting specific legal/tax advise from our own counsel, but for now this is a 30,000 foot view to see if we at least agree in concept to a structure before really diving in.