1031 exchange and partnership interests

Dear 1031x.com: When a partnership sells a property and one of the three  partners does a 1031 exchange with his share, how is the exchange  reported?  On the partners K-1?

Dear C:  IRC section 1031 specifically excludes partnership interests from tax deferral under that section.  The best way to accomplish what you seek is probably as follows:  The partner wishing to exchange withdraws from the partnership and receives a deed to the property being sold from the partnership for his fractional interest in the property.  When the property sells the partner receives its interest in cash and the co-owner (former partner) performs a 1031 exchange.  Does this work in your case?  Sincerely,

Steve Hickox
Attorney / President

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