Understanding Real Estate

Tax-Deferred Exchanges

A partnership can sell real estate it owns and exchange it for more real estate if it takes title to the replacement property in the name of the partnership. For example, "ABC Ltd. Partnership" is the seller and the replacement property is sold to "ABC Ltd. Partnership". However, if the partnership only wants to sell a portion, such as the sale of "25% interest in ABC Ltd." which owns a building, this would be unacceptable and the IRS will DISALLOW the exchange.
What if one or more members of a partnership wish to do an exchange and the other members do not? Well, although it sounds difficult, there is a way to accomplish a totally tax-deferred exchange. However, it would take too much space to explain it here. Buy my book and read the chapter on partnerships.