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I did a 1031 exchange of property held by a partnership of

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California property to multiple Texas...
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: 2 years ago.Category: Tax
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8/28/2015
Tax Professional: Robin D., Senior Tax Advisor 4 replied 2 years ago
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15,880
Experience: 15years with H & R Block. Divisional leader, Instructor
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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

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Tax Professional: Robin D., Senior Tax Advisor 4 replied 2 years ago

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Category: Tax
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