1031 Exchange - Title Change from Single Man to Community Property - Spidell

1031 Exchange – Title Change from Single Man to Community Property

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Message Board 1031 Exchange – Title Change from Single Man to Community Property

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    • #262418
      Anonymous
      Member

      A California taxpayer holds title to a California rental property as a single man.

      He has since been married and is in the process of performing a 1031 exchange.

      They would like to hold title to the acquired property as community property. Does a change in title cause any issues with the 1031 exchange?

       

       

    • #262458
      Diane White
      Participant

      One of the basic requirements in a 1031 exchange is the way title is held in the old property must be exactly the same way it is held in the new property. Therefore if the rental is held as his sole and separate property as a single man, the new property will have the title held the same way. One way your client may be able to circumvent this is to Quitclaim and undivided interest to his spouse and change the title on the rental before the exchange occurs. It is best to check with the accommodator on timing and the mechanics. Transfers between spouses is a tax-free event.

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