[WSBARP] 1031 Question

[Craig Gourley]

Good afternoon Catherine,  The short answer is yes.  The structure must be as a Tenant in Common and not a partnership.  If they are using an LLC then they need to be the sole member ( Spouses are OK) and that LLC would be a TIC with the other owner.  Note that they would need to elect out of the partnership, status under IRC 761, as partnership is the default in joint ownership.    In preparing the operating agreement take note of Rev Proc 2002-022 which has very specific guidelines that will be violated if you use a standard partnership agreement and just change the designation from partner to co-tenant as many practitioners are tempted to do.  I am happy to answer any specific questions you may have.  My cell is 425-870-9530. Thanks, Craig


GOURLEY LAW GROUP
THE EXCHANGE CONNECTION
SNOHOMISH ESCROW
P.O. Box 1091
Snohomish, WA 98291
PH:  (360) 568-5065 (800) 291-8401
Fax: (360) 568-8092

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From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Catherine Clark
Sent: Wednesday, May 1, 2024 11:12 AM
To: WSBA Real Property Listserve <wsbarp at LISTS.WSBARPPT.COM>
Subject: [WSBARP] 1031 Question

All:

May a person who elects a 1031 Exchange, use the proceeds from the sale of the first property to purchase the second property with another person?  If so, what are the rules for such a process.

All direction appreciated.

Thank you.


Catherine "Cat" Clark
Law Office of Catherine C. Clark PLLC

110 Prefontaine Place South, Ste. 304

Seattle, WA 98104

Phone: (206) 409-8938
Email: cat at loccc.com<mailto:cat at loccc.com>



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