Gifting vs Quit Claim Options

[kenmoremmm]

I don't know much on the subject, so I thought I'd ask.

We have a rental property. Paid off. Been rented out for 8 years. I'd like to part ways with it. Initial thought was 1031, but I'm curious if there's a workaround that would allow me to either gift it or quit claim it to a 3rd party (good, trusted friend), and then sell, and then transfer $$$ back over to me. The idea behind it would be to step up the basis and remove the depreciation recapture.

Doable?

[former player]

Tax fraud?  Money laundering?  Maybe, maybe not, but you (and your trusted friend, separately) would need cast iron legal advice that it wasn't.

[cooking]

I realize this thread is pretty old, but I took the risk of jumping in.

1.  Research what IRS considers "step transactions), in short doing in several steps what you couldn't do directly to save taxes.  They are not allowed by the IRS.

2.  Have you taken into account all the other tax consequences of doing the transaction in the way you propose?  (Capital gains to the straw man (your friend), gift taxes?