Cash Out Refinance to LLC?

[Taylor Hendricks]

A year ago I purchased a duplex with an FHA loan under my name. I since have created a LLC that I would like to do a majority of my deals under moving forward. Would I be able to do a cash out refinance of the duplex and put the extra funds into the LLC? Would I be able to use a 1031 exchange with this, or not since its a different entity? Any help would be greatly appreciated!

[Dave Foster]

@Taylor Hendricks a 1031 doesn't happen until you actually sell a property. A cash out refinance does not create a taxable event. So you can refinance anything you want and contribute that cash to your LLC to be used by the LLC.

When you sell and do a 1031 the taxpayer for the old property needs to be the same as the taxpayer for the new property. That's what you're referring to. And you're right there as well - if your LLC is a disregarded entity meaning it only has one member and does not file it's own tax return then you and the LLC are the same taxpayer.