1031 Tax Question

[Zane Cress]

I have a note out to my tax person but they take a minute to get around to things sometimes, wanted to see if anyone has dealt with this situation before.

Sold property in my LLC and purchased new property with a hard money loan. Just started the Refi process and my lender sent the title search under my personal name and is starting the loan in my personal instead of LLC. If I Refi this into my personal will I create the taxable event? It's still used as a rental and my LLC is a single member. On taxes I believe we file as a nonqualified entity for the business.

[David Orr]

Moving a property into or out of an LLC you own isn't a taxable event (as long as it's not an S corp). And having the loan under your name wouldn't matter either.

In the subject you mentioned "1031".  What was the 1031 aspect of this?  Did you do a 1031 when you sold the old property and bought the new one?  You would have had to do that through a 1031 intermediary by the way.  You can't call it a 1031 after it's done if you didn't actually make the transactions with a 1031 intermediary.  It's a very common mistake where an investor sold and bought properties and then when it's tax time they find out they didn't do the right process to actually qualify as a 1031 exchange.  

David Orr
Tax Modern