im so glad that i foudn your site.  im in the middle of a 1031 reverse exchange and you site has been so helpful.  thank you.  this post is about the llc that the exchange company put my property in during my 1031 reverse.  they said they setup the llc for my account and will then give it to me when my 1031 reverse is done.  i guess they dont deed the proerpty to me but give me the llc. i asked what i do with it after that and they said i have to consult with my attorney.  can you help tell me what this means and what i should know about this?  thank you again.

Hi Jack,

Yes, in the case where the Exchange Accommodation Titleholder or "EAT" acquires and holds or parks title to the like-kind replacement property that you acquired as part of your reverse 1031 exchange transaction, it is generally preferred by most EATs to assign or transfer 100% of the membership interest in the limited liability company to you instead of recording a deed from the limited liability company to you. 

This means that at the back end of your reverse 1031 exchange transaction when you have sold and are closing on your relinquished (sale) property you will deed the relinquished property directly to the buyer and simultaneously your Exchange Accommodation Titleholder or EAT would assign and transfer 100% of the interest in the limited liability company (LLC) to you. 

Your reverse 1031 exchange has been completed, so you can now retain the property in your LLC and retain the LLC for liability protection or you can choose to record a deed and transfer the property out of the LLC into your name and then dissolve the LLC.  There are a variety of potential issues legal, tax and financial issues here, which is why your Qualified Intermediary/Exchange Accommodation Titleholder suggested you contact your advisors.  Your advisors can look at your overall financial objectives and help you decide whether retaining the property in your LLC is appropriate for you. 

The general guideline that I usually follow is that most of the time it is better and simpler and cheaper to own the property in your own name with really good insurance coverage.  However, should you have increased liability concerns for any reason, you may want to consider retaining the LLC to help shield you from risk.  Your advisors can help you assess your level of risk and your tolerance for risk as well.

thank you.  you guys are the greatest.