1033 Exchange of Partners

[Michele]

I am not very familiar with the ins and outs of a 1033 exchange. I am trying to get this information for a couple of clients that I have.

I have given them the basics as to how long they have to replace a piece of property lost by eminent domain. However, they have asked me a question that I haven't found anywhere that it is addressed. Your help in this matter would be greatly appreciated.

The land was taken by the county. The land was owned by a partnership, one of the partners knows he wants to do a 1033 exchange, but the other partner is not sure what he want to do with his proceeds. Is it possible for one of the partners to do a 1033 exchange and the other partner take the money and pay the taxes on his share, or do both have to do the 1033 exchange. The second questions is, if they decided to both do the 1033 exchange and one of them backs out before the 3 year time limit is up, what kinds of penalties will there be?

My daughter is getting married in 10 days and at this point, I am brain dead and can use all the help you can give me.

Thanks

Michele