# Mortgage and tax question

3 Replies

My spouse and exchange 1 property from CA for 10 properties SFR in another state. Because it's require both our name on new loans from previous sell, we are not stuck at 10 loans. We plan to use some cash and paid off some of those loans and free up # of mortgage and change the title of the properties into LLC.

Would this triggers tax for any mortgage clause for us?

Thank you for your time

@Connie Cao Your question is not very clear.

Max number of loans = 10 per person. If the title is in a LLC but it is a loan in your name it still counts as part of the 10. If title is in a LLC and the loan is to the LLC it does not count as part of the 10.

Changing title to the LLC will not reduce your number, and it can trigger the due on sale clause with your mortgage. It also offers little protection because you already "pierced the veil" of the LLC by buying it in your name and loaning it in your name

I plan to pay a few loans of for refinance them to a portfolio loan under a llc name. Or slowly pay some loan off Then move them to llc. clear up rooms for future purchases and DTI. But worry from the tax standpoint where I exchange it to avoid taxes now I change mortgage type or title. Not sure it will complicated on taxes.

@Connie Cao , a refinance of a property is not a tax trigger. You are simply accessing equity by placing debt on it. Contributing the properties into an LLC also is not generally a taxable event.

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.