1031 split up to 5 partners...how?

[Obin Olson]

Scenario:1 commercial prop owned by 5 people

Goal: sell it to me but they each want to split proceeds AND use 1031 to go buy individual props.

problem: not doing a single like-kind exchange it looks like they can't split it up and go invest in props individually 

solution/reward: anyone(attorney) that can solve this by creatively coming up with a method UP front OR on the back end of this transaction gets my business to solve this problem.

text me if you think it can be done and let's discuss asap, I want this prop, the price is agreed, we just need to solve this issue.

nine one zero two six two three four three four

thanks.

-Obin Olson

[Stanley Bronstein]

@Obin Olson How do the 5 present owners hold title? Do they hold it in an LLC and they each own a piece of the LLC, or do they each own undivided interests in the property as tenants in common.

If they are tenants in common, there is no problem with them going their separate ways and doing separate 1031s.

If they are members of the LLC, then the entire LLC is who needs to be doing the 1031 exchange, not the individual owners. The way around that is to distribute the property to the owners in advance of the property sale, but there are traps and pitfalls you need to look out for.

Here's a link to an article I found on the subject through a quick Google search.

https://www.accruit.com/blog/1031-drop-and-swap-ou...

The bottom line is hire a knowledgeable attorney and CPA to figure out what you can and can't do and then figure out what needs to be done and then take their advice.