Selling Property with remaining mortgage that is in an LLC.

[Darlene S.]

Can someone sell a rental property quit claimed to an LLC, while mortgage is in personal name? Would it be necessary to transfer back to personal name? Does it complicate matters when planning to do a 1031 exchange?

[Travis Sperr]

When doing the exchange you will need the relinquished and replacement property titled the same. I did this a couple years ago - mortgage in personal name, but titled in LLC, the LLC is used for all of the income and depreciation so the replacement property needs to be titled the same. I am not a CPA, Attorney or qualified to respond to this post, but did a reverse exchange exactly how you describe.

Any reasonably qualified 1031 company or CPA should be able to walk you though this.  

Your bigger challenge could be taking title in the LLC for the new purchase, unless working with a local bank who will allow it - like Firstbank.