You have 2 problems here.
1: The entity has to be consistent.
EG: John Smith is not Smith LLC is not Smith Partnership is not Smith, Inc.
If you sell the downleg as Smith LP, you need to buy the upleg as Smith LP.
2: You need to buy for as much as you sell for.
EG:
Smith LLC sells for $500k (which it originally bought for $200k).
The proceeds are $100k cash and $400k of loan payoff.
The subsequent purchase needs to be for $500k.
How do I know this?
I am the former senior exchange consultant for 1031 Exchange Advantage (aka Prudential 1031).
Things that don’t matter:
-The size of the profit (unless it is small enough for a 1031 to be irrelevant).
-The percentage of ownership of each of the members
-The type of property. Real property is real property and personal property (like stock certificates or ownership documents) are not.
