One of our LLC clients, a partnership, has held as its only asset a rental property for five or so years.  In 2021, they decided to sell the rental property and terminate the partnership.  Instead of receiving her sales proceeds in cash, one of the partners decided to do a 1031 exchange.  As required by the exchange rules, her proceeds were held by an intermediary agent, and when the time came, those proceeds were applied to the new property.  All the timing rules associated with a 1031 exchange were followed.

I haven't been able to figure out how logistically (and properly, of course) to handle this transaction.  Since it doesn't look like there's a way to report a like-kind exchange for part of a property at the partnership level, should I just pass the sale through to the individuals, and then somehow report the like kind exchange at the individual level?

If anyone has any experience or thoughts about this transaction, I would really appreciate your insights.

Thank You!