Can I sell in my own name and buy in my revocable trust (or vice versa)?

Two statutes, read in order, make the living trust you

Section 676(a) does the first job: "The grantor shall be treated as the owner of any portion of a trust... where at any time the power to revest in the grantor title to such portion is exercisable by the grantor or a non-adverse party, or both." A living trust you can revoke is that trust.

Section 671 does the second: where a person is treated as owner under that subpart, "there shall then be included in computing the taxable income and credits of the grantor... those items of income, deductions, and credits against tax of the trust which are attributable to that portion." The exchange is therefore your exchange.

The practical result is the same freedom a single-member LLC gives you. Sell in your own name and take the replacement deed in the trust, sell out of the trust and buy personally, or move between two trusts you are the grantor of. Which LLCs can do a 1031 covers the entity version of the same principle.

The trustee signs the documents and your 1040 reports the exchange

Signature authority and tax identity are separate questions. The trustee, acting in that capacity, signs the exchange agreement, the assignment of the sale contract to the intermediary and the deed; the return that carries Form 8824 is yours.

Reg. §1.671-4(b) is what keeps the paperwork simple. A trust wholly owned by one grantor can use the optional method under which the trustee furnishes "the name and taxpayer identification number (TIN) of the grantor... and the address of the trust" to payors rather than filing Form 1041, provided the grantor has given the trustee a completed Form W-9.

Give the intermediary a certification of trust and the trustee's name as it will appear on the deed before documents are drafted. Where you are also the trustee, that is one signature block; where a co-trustee or a successor is serving, it is two, and escrow will need both.

An irrevocable non-grantor trust is a separate taxpayer on both legs

If the relinquished property sits in a trust that pays its own tax, that trust is the exchanger. It engages the intermediary, it identifies the replacement, and it takes title. The grantor cannot buy personally, and beneficiaries cannot take their shares and go their own way.

The line between the two kinds of trust is drawn by the powers in the document, not by the word "irrevocable" on the cover. An irrevocable trust can still be a grantor trust for income tax if the grantor retained one of the powers in §§671 to 679, which is a reading exercise for your attorney rather than a guess.

Where a trust owns property and the family wants different outcomes, plan before the listing rather than after the contract. Trust-owned real estate strategies and property in a no-step-up trust work through the options.

Not every trust counts as a trust, and one revenue ruling is why DSTs work

Reg. §301.7701-4(a) describes an ordinary trust as an arrangement where trustees "take title to property for the purpose of protecting or conserving it for the beneficiaries," whose beneficiaries "are not associates in a joint enterprise for the conduct of business for profit." An arrangement that fails that test is classified as a business entity instead.

That matters because a beneficial interest in a business entity is not real property. Reg. §1.1031(a)-3(a)(5)(iii) lists "certificates of trust or beneficial interest" among the intangibles that can never qualify, whatever state law calls them.

The Delaware statutory trusts used as replacement property are built to stay on the right side of that line, which is what Rev. Rul. 2004-86 addressed. The Delaware Statutory Trust 1031 guide explains the structure, and exchanging into a DST from an LLC or trust covers the signature requirements.

What PLR 202416012 actually decided about property distributed by a trust

The ruling is narrow and useful. A testamentary trust terminated automatically on the death of the last surviving measuring life, the trustees were already negotiating a sale, and each exchanging beneficiary was to receive an undivided tenancy-in-common interest — through a disregarded single-member LLC — subject to the signed contract.

The IRS ruled that the distribution "as result of Trust's involuntary termination, will not preclude such Interest from being held for investment or for the productive use in a trade or business within the meaning of § 1031(a)." It distinguished Rev. Rul. 75-292 and Rev. Rul. 77-337, which "involve voluntary transfers of properties pursuant to prearranged plans."

Read the limits as carefully as the holding. The termination was fixed by the decedent and could not be changed, the distribution was to happen whether or not any exchange followed, and §6110(k)(3) provides that a private letter ruling "may not be used or cited as precedent." A discretionary distribution timed around a sale does not sit on these facts.

Worked hypothetical: an $850,000 sale out of the living trust

Round hypothetical numbers. Your revocable trust holds a fourplex and sells it for $850,000, clearing a $260,000 loan and $48,000 of costs, so $542,000 reaches the intermediary. The trustee signs everything and the sale is reported under your Social Security number.

You buy a $900,000 replacement and, because the lender prefers an individual borrower, take the deed in your own name with a $360,000 loan. Same taxpayer, satisfied: the trust was never a taxpayer separate from you, and Form 8824 sits on your personal return either way.

Change one fact. Suppose the seller was your late mother's trust, which became irrevocable at her death and now has its own EIN. That trust is the exchanger, the replacement deed has to read in its name, and neither you nor your siblings can take title personally.

What the intermediary and title company will ask for

Trust closings stall on documents rather than on law, so send these at the start rather than in the closing week. Have your attorney confirm the trust's grantor status and the trustee's authority before the sale contract is signed, since neither can be fixed after the deed records.

• A certification of trust or the relevant trust pages showing the trustee's power to sell, buy and borrow
• The trust's exact legal name and date, as the deed and the exchange agreement will both recite it
• Whether the exchange will be reported under your own number or a trust EIN
• The names of all serving trustees and any co-trustee signature requirement
• For an inherited or irrevocable trust, the date it became irrevocable and the EIN issued for it
• Where the replacement will be a trust interest rather than a building, the accreditation paperwork in the trust's name