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Updated over 9 years ago,
1031 Exchange with partners
Assume my partner and I form an LLC to purchase a multi-family property in which ownership is split down the middle 50/50. After some time, one or both of us decide to sell our share. A few questions for different scenarios. Bare in mind that some questions may be repetative, but due to the complexity of certain tax laws I just want to make sure I'm covered:
****Assume that the property has appreciated in value
1: I decide to sell my full 50% share to my partner. Will I still be able to utilize the 1031 exchange law by investing the funds into another property owned by a separate LLC
1A: If yes, can I put those funds towards equity on an already existing property in a different LLC?
2: I decide to sell 40% of my share and retain 10%. Do the same rules apply as in question 1 and 1A?
3: We both decide to sell our full shares. Can we both utilize the 1031 exchange as described above?
These questions stem from my confusion about the cash going in and out from one LLC to another. Can someone elaborate on this please? As well as touch on any other concepts or laws I might be overlooking.
Thank you in advance