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Richard, Lawyer
Category: Real Estate Law
Satisfied Customers: 53715
Experience:  32 years of experience as lawyer in Texas. I'm also a Real Estate developer.
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I you hae a partnerhip interest in a real estate partnership

Customer Question

I you hae a partnerhip interest in a real estate partnership can I exchange it under 1031 for a other investment?
Submitted: 6 months ago.
Category: Real Estate Law
Expert:  Richard replied 6 months ago.
Good morning John. My name is ***** ***** I look forward to helping you. Can you clarify something for me? Are you wanting to do an exchange with the partnership interest itself? Thanks.
Customer: replied 6 months ago.
want to get into a new partnership or into real state that I own by my self
Expert:  Richard replied 6 months ago.
Thanks for following up. You can exchange real property for real property under Section 1031. But, partnership interests cannot be exchanged as they are specifically excluded as qualifying exchange property. Specifically, the IRS guidelines outline the rules for the kinds of property which qualify for 1031 like kind exchange treatment ( "What property qualifies for a Like-Kind Exchange?Both the relinquished property you sell and the replacement property you buy must meet certain requirements. Both properties must be held for use in a trade or business or for investment. Property used primarily for personal use, like a primary residence or a second home or vacation home, does not qualify for like-kind exchange treatment.Both properties must be similar enough to qualify as "like-kind." Like-kind property is property of the same nature, character or class. Quality or grade does not matter. Most real estate will be like-kind to other real estate. For example, real property that is improved with a residential rental house is like-kind to vacant land. One exception for real estate is that property within the United States is not like-kind to property outside of the United States. Also, improvements that are conveyed without land are not of like kind to land.Real property and personal property can both qualify as exchange properties under Section 1031; but real property can never be like-kind to personal property. In personal property exchanges, the rules pertaining to what qualifies as like-kind are more restrictive than the rules pertaining to real property. As an example, cars are not like-kind to trucks. Finally, certain types of property are specifically excluded from Section 1031 treatment. Section 1031 does not apply to exchanges of: Inventory or stock in tradeStocks, bonds, or notesOther securities or debtPartnership interestsCertificates of trust"Thank you so much for allowing me to help you with your questions. I have done my best to provide information which fully addresses your question. If you have any follow up questions, please ask! If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service as OK, Good or Excellent (hopefully Good or Excellent). Otherwise, I receive no credit for assisting you today. I thank you in advance for taking the time to provide me a positive rating!

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