All Forum Posts by: Jonathan Jacobsen

@Jonathan Jacobsen, There's nothing inherently wrong from the 1031 side of things. And contributions into and out of LLCs in return for membership interest are not generally a problem either. There are some accountants who would like to see a tax filing in the old name before doing that. But it's up to your individual accountant's preference. It sounds like you have a sound business reason to combine those pieces of property. I would imagine your accountant will agree.

Just understand that as soon as you contribute the property into the new LLC it will become the taxpayer for the property. So any future 1031s will require that the LLC (and all members) go forward together. Just a thought, but you may want to consider forming a multimember LLC (with the same membership as all of the LLCs that own the property) that will not own the property. But will manage the property for the LLCs that actually own the property. You can pass along all liability and expense that way without actually transferring the property.

@Dave Foster

Going back and reading this it sounds like your idea may be better. Are you suggesting that the properties would still be owned individually by me and my partner (in their own single member llc) but we setup a separate management company to receive rent and distribute out to us?

1 Vote

ok, thanks. My biggest concern was by contributing the property to a new LLC, which i did not wholly own, after the transaction was complete that it would void the 1031.

But it sounds that as long as I buy the new property in my name and then transfer it to the new multi member llc, I am in the clear and do not violate any 1031 rules.

0 Votes

What are the rules for contributing a property into an LLC after the transaction is complete?

I have a rental property that I will be selling that is owned personally. I will be exchanging this for another property that will be purchased personally. Can I then contribute the property into an LLC with other partners or do I need to hold the property in my personal name for a seasoning period?

The other member of this LLC owns the other portion of the property personally and we would like to both contribute our properties into one llc for liability purposes but I do not want to run afoul of 1031 rules.

0 Votes

All Forum Posts by: Jonathan Jacobsen

Jonathan Jacobsen has started 1 posts and replied 3 times.

Post: 1031 exchange - Contributing property to multi member llc

Post: 1031 exchange - Contributing property to multi member llc

Post: 1031 exchange - Contributing property to multi member llc