“Help! New Wyoming, LLC & 1031 Exchange”
I would like to form a LLC to do a 1031 exchange and purchase a condo conversion unit in Miami Beach. I’m selling my condo in New York that was bought in my name through Chase Manhattan Bank, just four (4) months ago. Profit from the deal will be around $150k, I order to avoid capital gains; I am doing a 1031 exchange to purchase a new condo conversion (single unit) in Miami Beach.
I need an LLC, before I purchase in Miami to keep me isolated from ownership and financing due to other pre construction deals pending. The condo should cost me about $350k, in which all cash proceeds from the 1031 has to go into the property, that is about 40-45% equity in to the property at closing. I would then take an equity line to build my company’s credit along with the mortgage.
1. Does anyone know if forming a new LLC to purchase will cause problems within the 1031 exchange? Any referrals to form this LLC? Will a land trust be needed here?
2. Wells Fargo & Countrywide, whom offer incentives for this project, financed the condo conversion. Are there any other financial institutes, more flexible, that will finance the purchase of a new condo conversion (single unit)?
3. I will have to put a down payment on the Miami condo before I close on the sale of my New York condo, will I get that money back, since the money in escrow from the 1031 will be more than sufficient to close the deal?
4. It is said that a Wyoming LLC is the best, along side with Nevada & Delaware. Any suggestions?
I intend to go to the Assets Management classes, but need help now. Any referrals that you can give will be greatly appreciated.
Thank you, all.
Robb
**Please See My Profile**
As long as you set up an LLC that is a single member LLC where you are the sole and exclusive member it will not cause any trouble with your 1031 exchange transaction. Single member LLCs are considered to be disregarded entities and therefore ignored for income tax purposes and you would be treated as if you acquired the property individuallly (for tax purposes) while still enjoying the liability protection that the LLC provides. We use Delaware LLCs. Nevada LLCs are also good. I have never heard anything about the Wyoming LLC.
[addsig]
Don't have any valuable input, however, can anyone tell me what the real difference is in incorporating oneself vs. forming an LLC? I just recently incorporated and looked into and LLC and it didn't seem to be much different. Do you need 2 people to form and LLC and what is the major advantage of which in this business vs. an inc.
Thanks
Of course you have a right to ask for it
And if he doesn't provide you with a copy immediately, complain in writing to his Bar Association.
You will get your copy!