Loans to a Trust...

"The old property that I sold was in the name of my revocable living trust. The lender on my new property won't make a loan to the trust. Is this a problem?"

There are many types of trusts, and each type is handled differently by Section 1031. Probably the most common type of trust is the revocable living trust. You can tell if this is the type of trust that you are dealing with if it does not file a tax return. Luckily, revocable living trusts are disregarded for 1031 exchange purposes. This means that whomever (?) owns the trust is treated as having sold the old property and is treated as the buyer of the new property. If that is you, your lender may make the loan to you and you may take title to the property in your own name. Call us first and we’ll double-check the type of loan you have.

--The Experts