( The following is an excerpt from our 1031 Advisor newsletter located here )
Recent events in the financial markets highlight the frequent, yet painful, lesson that commonly accepted thinking is not always correct thinking. Exchanges of partnership assets and partnership interests commonly fail to appreciate the inherent tax risks which accompany these types of exchanges.
Assume the following scenario: A Limited Liability Company, which is owned equally by four individuals, sells an appreciated asset. Two of the members/partners want to cash out of their investment. The following is a summary of techniques used by many advisors.
