MLRE: Why 1031 Exchanges Break in Syndications (And How to Work Around It)
Tax Smart Real Estate Investors PodcastShow Notes
In this episode of the Major League Real Estate Podcast, we break down everything you need to know about 1031 exchanges and why they get complicated fast when syndications are involved.
We cover:
- Why you can’t directly 1031 into a syndication - The biggest issues GPs and LPs run into when trying to defer taxes - Workarounds like Delaware Statutory Trusts (DSTs) and Tenants-in-Common (TIC) structures - Advanced strategies like drop-and-swap and how to plan for them on the front end - Common pitfalls including boot, debt replacement, and IRS scrutiny
We also cover practical advice for syndicators, like how to structure deals upfront if you want to offer 1031 optionality, and what investors should look for when trying to defer gains into their next opportunity.
Whether you're an active investor, passive LP, or syndicator, this episode will help you understand how to properly navigate 1031 exchanges without blowing up your deal or your tax strategy.
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