I am selling an property and want to 1031 from that property to another property I currently own in a C corp. The LLC will purchase the C corp asset and start a new basis and go forward. I want to then close the C corp.
Although an LLC can buy the asset of a C corp., that's not going to work for a 1031 exchange involving two companies you own. The IRS will treat the "exchange" of the property owned by the C corp. as having occurred in a deemed liquidation and distribution, which will cause the C corp. to recognize tax based upon the fair market value of the property that exceeds basis. You then also will recognize tax based upon the deemed distribution of dividends.
