Related Party 1031 Exchanges

Discussion in 'Tax' started by daojoneser, Feb 3, 2006.

  1. daojoneser

    daojoneser Guest

    Me and my business partner are each 50% owners of an LLC.
    We are involved in a 1031 exchange. One of our
    identification properties is owned by my business partners'
    mother. It is a residential investment property which she
    has lived in for 2 of the last 5 years, thus making gains on
    the property (250K/person) non taxable per my understanding.
    If we purchase her property and she does not exchange but
    instead "cashes out" have we violated 1031 related party
    rules? If we are violating 1031 rules, can we satisfy them
    by decreasing my business partners share in the LLC to below
    50%? We intend to hold the property for at least 2 years.

    Thanks in advance for your answer.
    Last edited by a moderator: Jan 23, 2018
    daojoneser, Feb 3, 2006
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