1031 Exchange

Can You 1031 Into an LLC Without a Drop-and-Swap? Understanding Revenue Rulings 99-5 & 99-6

May 27, 2026
devinlucas

A Smarter Alternative to the Drop-and-Swap? Understanding Revenue Rulings 99-5 & 99-6. Can you use a 1031 exchange to buy into or buy out an LLC that owns real estate? Surprisingly, under certain IRS rulings, the answer may be yes. Revenue Rulings 99-5 and 99-6 create little-known planning opportunities involving LLCs, partnership interests, and investment properties — but the rules are highly technical and mistakes can be extremely costly. In this article, we break down how these strategies work, common pitfalls involving family partnerships and related-party rules, and why careful planning is essential for Newport Beach and Costa Mesa real estate investors navigating LLC ownership, 1031 exchanges, and capital gains planning.

How to Turn Your Primary Residence Into a 1031 Exchange and Defer Massive Capital Gains Taxes: The 4-Year Strategy

April 23, 2026
devinlucas

In high-value markets like Newport Beach and Costa Mesa, capital gains taxes can be brutal. But for some homeowners, a carefully timed move-out, rental conversion, and 1031 Exchange can create one of the most powerful wealth-preservation strategies available. Sometimes, four years can change everything.

1031 Exchange Explained: How Newport Beach & Costa Mesa Investors Can Defer Capital Gains Taxes

April 23, 2026
devinlucas

The 1031 Exchange remains one of the most powerful tax strategies available to real estate investors. By deferring capital gains taxes and reinvesting into new property, investors can grow wealth more efficiently. In this guide, we break down how it works, key rules, and strategies tailored to the Newport Beach and Costa Mesa markets.

What the 2025 Federal Tax Reform Means for Homeowners (aka The Big Beautiful Bill’s Impact on Real Estate)

July 14, 2025
devinlucas

The 2025 federal tax reform delivers major wins for homeowners, investors, and business owners — from increased SALT deductions and permanent mortgage interest deductions to restored bonus depreciation and preserved 1031 exchanges. But despite these changes, key homeowner benefits like the capital gains exclusion remain unchanged since 1997, fueling ongoing calls for reform. At Lucas Real Estate Group, we break down what this means for Newport Beach, Costa Mesa, and coastal Orange County property owners.

Opportunity Zones Explained: How to Defer and Potentially Eliminate Capital Gains Taxes in Real Estate

May 25, 2025
devinlucas

The federal Opportunity Zone program offers one of the most compelling tax incentives for real estate investors and individuals with capital gains. By reinvesting gains into a Qualified Opportunity Fund (QOF), you may defer—and potentially eliminate—federal capital gains taxes while investing in long-term real estate or business projects. Learn how the program works, what qualifies, and why now may be the right time to take advantage.

Can You 1031 Exchange Out of an LLC That Owns Real Estate? Not Directly — But There Are Workarounds

May 22, 2025
devinlucas

Think you can do a 1031 exchange with an LLC interest? Not so fast.
Many investors are surprised to learn that LLC membership interests are excluded from 1031 exchange eligibility under IRS rules. But with proper planning—like “drop and swap” strategies and other structuring techniques—you may still be able to defer taxes. In this article, we break down the risks, workarounds, and best practices for LLC-held real estate in high-value markets like Newport Beach.

Structured Installment Sales in Real Estate: A Niche Strategy for Tax Deferral

May 22, 2025
devinlucas

Structured Installment Sales offer real estate sellers a niche tax-deferral strategy with long-term income potential. Learn how this IRS-approved method, backed by IRC § 453, works — and how Lucas Real Estate Group helps Newport Beach and Costa Mesa clients implement it seamlessly.

Can You 1031 Exchange Out of a Limited Partnership That Owns Real Estate? Not Directly — But There Are Workarounds

May 16, 2025
devinlucas

Can you complete a 1031 exchange if you only own a limited partnership interest in real estate? Not directly—but strategic solutions like the “drop and swap” may provide a path forward. In this article, we explore the legal and tax complexities of navigating 1031 exchanges from within a partnership, with a focus on opportunities in high-value markets like Newport Beach.

info graphic with photo of a home being swapped for another, with text "1031 exchanges: can you defer taxes on an empty home"

1031 Exchanges and Vacant Properties: Can You Defer Taxes on an Empty Home?

March 12, 2025
devinlucas

Can a Vacant Property Qualify for a 1031 Exchange?
The IRS focuses on investment intent, not just rental income, to determine eligibility. Key factors include the original purpose of acquisition, tax treatment, marketing efforts, and whether the property was ever used personally. Court cases like Alderson v. Commissioner and Reesink v. Commissioner have ruled that properties held for appreciation—despite never being rented—can still qualify.
Read the full article for key legal precedents and expert guidance.

1031 Exchange aka the Like-Kind Exchange – An Overview and How To

May 10, 2023
devinlucas

A detailed article on the like-kind exchange aka the 1031 exchange, including requirements and discussions on use with personal residences, and interplay with the IRS section 121 exemptions. There may be no better tax incentive than the 1031 Exchange, available exclusively to real estate investors.

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