Who Can Do A 1031?
Is a 1031 just for individuals that own RE, or can Corp's, S-Corp's and LLC's take advantage of them?
Is a 1031 just for individuals that own RE, or can Corp's, S-Corp's and LLC's take advantage of them?
Any taxpaying entity - individual, partnership, limited liability company, corporation - that owns rental, investment or business property can complete a 1031 exchange. Generally, the same taxpaying entity must on both sides of the transactions.
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You need to look at what qualifies as a like-kind property.
Qualifying property is broadly defined, for both the property being transferred and received, as realty used for investment or business purposes.
The tax regulations simply state that real property must be exchanged for real property. The purpose and intent (investment) of the taxpayer takes precedence. Following are some qualified like-kind exchange examples:
* An office building for a mall
* A shopping center for land
* Land for an industrial building
* A fee simple for a tenancy-in-common
* An industrial building for a multi-family property
Due to the broad definition of like-kind property, the identification of replacement property is easily accomplished.
Real estate may not, under any circumstances be exchanged for a limited or general partnership interest of an entity which holds real estate or for stock in a corporation that holds real estate (such as a REIT).
Real estate should be held for the long-term capital gain period of one year before disposition in order to satisfy section 1031's requirement of being held for investment or business purposes.
Thus personal use realty is not eligible for 1031 treatment.
Hope this helps.