Transferring ownership to my LLC

[Ben Kappel]

Question, I'm doing a refinance on a duplex I bought in just my name. Since then I have bought property under an LLC.
I am debating on changed the ownership while refinancing from my own name to my LLC.   Process seemed easy enough on the title side and financing side.    
One property is under the LLC, 5 are just under my name.  

Are there any tax consequences in doing this change?   Capital Gains due?   Recorded sale?  Title works is handled,  I’m just wondering if there is any downside I may not be thinking of??  

I know owning multiple properties under one LLC is a kind of gray area, but it's gotta be better than my personal name.

[Savannah Wallace]

Hi Ben,

Depending on where the property is located, there may be transfer taxes applicable upon transfer to the LLC. However, there may be exceptions available, such as moving the property into a trust and then assigning the beneficial interest of the trust to the LLC.

My recommendation to my clients is to utilize one LLC per property to separate out the liability and to utilize a Wyoming holding LLC to provide anonymity and charging order protection. The decision of whether to establish multiple LLCs, especially for each individual property, is a matter of individual risk tolerance and a cost-benefit analysis. While each LLC provides a dedicated layer of protection for a specific asset, there are ongoing costs associated with maintaining an LLC, such as annual registration fees, which can vary by state and may amount to a few hundred dollars per year. The cumulative cost of maintaining several LLCs should be weighed against the increased level of asset protection afforded by each separate entity. For my clients, I do believe that the benefit outweighs the costs and recommend utilizing separate LLCs.

Note: This information is for educational and informational purposes only and does not constitute legal, tax, or financial advice. No attorney-client, fiduciary, or professional relationship is established through this communication.