Can a foreign LLC owner do a 1031 exchange to defer FIRPTA tax? Or does FIRPTA block it?
I own a rental duplex in Arizona through my foreign-owned SMLLC and want to sell it and buy a larger property. I've heard about 1031 exchanges where you can defer capital gains tax by reinvesting in a like-kind property. Does this work for foreign owners? If I do a 1031 exchange, does the buyer still withhold the 15% FIRPTA amount at closing? That would defeat the whole purpose since I need the full proceeds to buy the replacement property.
I'm a citizen of Israel, non-resident alien.
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