When it comes time to determine how you need to take title to your new Replacement Property there are several things to consider.
First, it is always better to acquire your new property in the same entity as which you sold your old property. This is because you are maintaining the same taxpayer throughout the exchange. However, for several reasons, Exchangers can find that they need to transition their ownership interest into a new entity or structure for their Replacement Property.
In many cases transitioning into a different entity is not a problem, provided the entity essentially remains as the same taxpayer or as a disregarded entity for the purposes of paying tax. Below are a few examples of transitioning into a different entity which will not jeopardize an exchange.
Try the Vesting Wizard
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