Can I do a 1031 exchange if I voted against the condo deconversion?

The Code tests how you held the unit and how the money moved, never whether you consented to the sale

Section 1031(a)(1) defers gain on real property "held for productive use in a trade or business or for investment" that is exchanged for like-kind real property. A rented unit meets that test whether you sold it gladly or under protest, and the deferred-exchange rules in Reg. section 1.1031(k)-1 turn on the transfer date and the handling of the money, not on the seller's state of mind.

Illinois makes the compulsion explicit. 765 ILCS 605/15(a) says the vote "shall be binding upon all unit owners" and makes it "the duty of every unit owner to execute and deliver such instruments" needed to close. You sign a deed you did not want to sign, but a deed for money is a sale, and a sale is what an intermediary can turn into an exchange.

The wider picture for everyone in the building is on forced to sell in a condo deconversion. This page answers one narrower question: whether being a dissenter changes your exchange. It does not.

In Illinois a timely written objection changes your payout formula, and the payout is still exchange proceeds

The statute rewards a filed objection, not a bare no vote. An owner "who did not vote in favor of such action and who has filed written objection thereto with the manager or board of managers within 20 days" receives the greater of the appraised value of the unit or the balance of the loan used to buy or refinance it, less unpaid assessments, plus reasonable relocation costs. If you and the buyer disagree on value, subsection (b) gives each side an appraiser, the two choose a third, and two of the three set your number.

For the exchange, every dollar of that is money paid for your unit at the sale. The risk is timing. If the panel is still sitting at the bulk closing and part of your money is held back, the later payment must go to the intermediary, not to you. No IRS guidance on a dissenter holdback was found, so agree the closing statement with your CPA before the panel convenes.

In Florida a bloc of no votes can stop the plan, but once it passes the trustee sets and pays your share

Optional termination under section 718.117(3) needs approval by "at least 80 percent of the total voting interests", and if 5% or more reject it "by negative vote or by providing written objections, the plan of termination may not proceed"; a rejected plan cannot return for 24 months. Florida dissenters can therefore block a sale that Illinois dissenters cannot.

If the plan passes, your remedy is a petition within 90 days of recording under subsection (16), limited to the fairness of the apportionment, the first-mortgage payoffs or the vote count. If you object to the trustee's estimated distribution under subsection (17)(b), the trustee may hold your share or deposit it in the court registry. Neither pauses the exchange clock; when the 45 days start in a bulk condo sale works through the dates.

Before the bulk closing, a dissenting investor does exactly what a willing seller does

Sign the exchange agreement before anything transfers. Paragraph (g)(4)(v) of the regulation treats the intermediary as a party to the sale when your rights are assigned to it and "all parties to that agreement are notified in writing of the assignment" on or before the transfer. In a deconversion the board or termination trustee and the closing agent send the wires, so they must receive the notice.

Never touch the money: under paragraph (f) a share "credited to the taxpayer's account" or otherwise made available to you is constructive receipt, and a cheque from the association ends the exchange. The deadlines are the same for the owner who voted yes and the owner who petitioned; whether any extension exists is a short read.

• Assignment notice delivered to the board or trustee, the buyer and the closing agent before the bulk closing.
• Closing instructions route your share, including any panel or holdback amount, to the intermediary.
• Written identification by day 45 and replacement closed by day 180 or the return due date, if earlier.

Worked model: a timely objection adds $20,000, and the exchange has to absorb all of it

Hypothetical round numbers. You bought a rental unit for $200,000 and took $50,000 of depreciation, so your adjusted basis is $150,000. The bulk buyer's allocation values the unit at $380,000; your Illinois objection goes to a panel, which sets $400,000. Your gain is $250,000, and the objection raised your proceeds by $20,000.

Nothing about the exchange changes except its size. The full $400,000 must reach the intermediary and be reinvested in replacement property of equal or greater value, with any loan payoff matched by new debt or added cash. Keep the $20,000 bump and it is taxable boot. Owners who have just been outvoted often want property no association can vote on; a Delaware statutory trust interest is one such option under Rev. Rul. 2004-86, but it is illiquid, gives you no vote on its own sale and can lose principal. Have your CPA check the basis and debt figures on your actual unit before you sign the replacement contract.