Selling Primary Residence to Entity Owned by Me (LLC etc)
Hello. First post here but I've been incredibly impressed by the level of knowledge and sophistication of the community.
I've seen this question asked before but I haven't seen an answer that address my specific concern.
I have a condo that I've owned as my primary residence. I have a $250,000 gain that I would like to preserve. There is no mortgage. I'm considering either selling it or renting it out. If I rent it I would want it in a Delaware single member LLC for liability protection.
My question:
1. Can I create a single member LLC (or other type of entity) that would buy the property from me at the new fair market price - either financed or not - and preserve my tax free gain.
2. The new LLC would acquire the property at the new fair-market stepped up basis and rent it out.
I would like to rent the property out but don't want the direct liability. I also would like to lock in the tax free gains. If I sell it to the LLC there would be transfer and title taxes but they will be much less than the taxes on the gains if I rent it out and choose to sell it in 5 years.
I will consult with a CPA but the worse case scenario would be I go through all the trouble to sell it to a single member LLC and somehow lose the exemption on the tax free gain.
Thanks