A partnership LLC did a 1031 exchange, selling one property and purchasing three properties, each purchased in its own single member LLCs, owned by the original LLC.
The tenant of one LLC went into bankruptcy and stopped paying rent. The LLC stopped paying the mortgage. The only asset of the LLC is the property. if the bank forecloses, and the single member LLC is insolvent, will the cancellation of debt income be taxable to the partners of the LLC?
Thanks
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Michael Rubinstein
Michael D. Rubinstein CPA, PC
North Bellmore NY
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