1031 Exchange Ownership Question

Technical topics regarding tax preparation.
#1
Sara369  
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1. The thing is, the client and her son own an FL real property together, she also owns an NJ real property under her own name. Can they use these FL and NJ properties to do 1031 exchange for a new property, and name the new property under her and her son’s name? They wonder if this situation qualifies Section 1031 exchange. Does the NJ property have to be under both her and her son’s name to qualify the exchange?
2. If the situation above doesn’t qualify, she also wonders if she can use the NJ house itself to exchange for a smaller and cheaper house. If that is the case, can she defer the whole gain? Is there an upper limit to defer a 1031 gain?

Thank you so much!
 

#2
Pitch78  
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Both the properties exchanged and those received have to be held for productive use in a trade or business or for investment.

Assuming that is the case, yes they can do a 1031 exchange in scenario 1, but not as you describe. Is the FL property in an LLC, or in their individual names? Keep in mind that the taxpayer that exchanges the property also has to be the taxpayer that receives the property. If the property exchanged is held in an LLC, the property received must be in the LLC.

If everything is in the individual's name, you will need to do a tenancy in common for the new property.
 

#3
Nilodop  
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Is this thread viewtopic.php?f=8&t=22598&hilit=+1031 about this same situation?
 

#4
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I would not recommend a 1031 exchange between related parties
 


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