transfer tax from s corp to multi member LLC

Mc Lean, VA · Member since 2016 · 2 posts · 0 votes

Hi everyone,

I have a unique situation wherein we placed 3 properties (all located in maryland, baltimore city) into an S corp and looking to transfer at least 2 of the properties out of the LLC into a multi-member LLC partnership.

1) are we subject to transfer taxes or fees for the transferring?

2) if so, what are the fees involved?

3) do you recommend a tax attorney that can help us do this process?

Thanks in advance.

- Edward

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Austin Cheatham
Accountant · Louisville, KY · Member since 2020 · 75 posts · 55 votes
1y
Just thinking in a different direction to make it simpler. Assuming the S Corp is an LLC, could you consider keeping the properties in the current entity and revoking the S election? Could save a lot of trouble and be accomplished relatively easily. If there's other activity going on in the s corp then that's a different story of course.
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Basit SiddiqiBusiness Member
Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
1y
It is generally not advised to hold appreciating property such as real estate inside of an S-Corporation.

Taking the properties out will be considered a taxable event.
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