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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15176
Experience:  15years with H & R Block. Divisional leader, Instructor
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I did a 1031 exchange of property held by a partnership of

Customer Question

I did a 1031 exchange of property held by a partnership of California property to multiple Texas properties. I want to set up new LLC's for each property. Do I recognize a gain on this transfer or does the basis carry over?
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.

Hello,

Transferring the 1031 replacement property to a Single Member LLC woudl not change the basis in the transferred property nor would it cause the tax deferred treatment of the 1031 to end.

A 1031 exchange followed by a transfer to a single-member LLC (ignored by tax purposes) has passed the Tax Court held that the transfer does not invalidate the tax-free nature of the exchange.

Maloney v. Commissioner,

The court explained that the corporation merely changed the form in which Elysian Fields was held from a corporation owned 100 percent by the individual to the individual’s 100 percent ownership

Expert:  Robin D. replied 1 year ago.

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