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Old 10-23-2017, 04:17 PM
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Property transfer from 1LLC to another-Taxable event?

We have a real estate company. Currently we have a property in our flipping LLC but now want to keep it as a rental. We want to put it in an empty LLC that we own. We have not made a profit on this property yet. My husband is concerned it will trigger a taxable event if we transfer. Will it? We are in Louisiana, not sure if that matters. My CPA is on vacation for another 10 days so I'm trying to resolve this sooner. Thank you for any guidance.



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Old 10-24-2017, 09:56 AM
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We have a real estate company. Currently we have a property in our flipping LLC but now want to keep it as a rental. We want to put it in an empty LLC that we own. We have not made a profit on this property yet. My husband is concerned it will trigger a taxable event if we transfer. Will it? ==========>> no tax liabilty in transfering the r/e to the LLC. you can transfer your personal property -- rental properties, for example , into an LLC without immediate tax consequences. Transferring property to an LLC can have unforeseen consequences. If you hold a piece of property you had earlier purchased for $200k and the market value at the point of transfer is $400k, that's the valuation at the moment of transfer, not the tax basis. The property's basis doesn't magically reboot when you make the transfer. Assuming you haven't paid taxes on the gain and only exceptional circumstances would make that likely -- along with the property, you've also transferred a tax liability for the $200k property gain to the LLC. This isn't a problem if you're the only person with an interest in the LLC. If other stakeholders are involved, you'll need to consult them, and you'll probably need legal advice about making the terms of the transfer equitable.You must put the property in theLLC name to transfer it to the LLC. If your LLC uses the transferred property to produce income, you will end up paying tax on that income. Your LLC can depreciate any assets it owns, and this includes property you transfer to it. This depreciation will reduce the tax bill on any income from the property. The IRS will allow the LLC to depreciate the property over the lifetime of the asset.The LLC will pass the tax liability on to you and the other LLC members, and you will pay individual income taxes on it.however, If the LLC sells the property at a later date, the gains on the sale will be taxed. Because the LLC doesn't pay taxes, this means yo as the LLC members will pay the tax on your 1040. Ensure that all members of the LLC understand this tax obligation before you transfer property to the company.



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Old 10-24-2017, 10:11 AM
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We actually have a loss as of now on property

We have a loss on the construction of the property at this moment. I put $100k cash into property, construction loan of 195K. Since I'm not selling it, I want to put in another LLC, refinance($280k) still about 15k less than is in property. Would this scenario cause a tax implication? It appraises for about $340 but I was not able to sell it. Now I'm turning it into a short term rental. I know i will have to pay taxes on the profit on that. I was switching LLC's because I use the current one to flip properties so i want it out of that one for liability purposes.

Thank you so much for your expertise.



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