Transfer of property from LLC to Personal

4 Replies

I currently have a property under my LLC. I am trying to sell it but so far no offers. I am considering renting it out instead of selling it. My problem is, in order to be able to pay back high interest loans and credit cards, I need the cash. I am thinking of transferring the property from my LLC into my personal name. This is the only way I can get a regular mortgage. Banks will not lend to an LLC that doesn't have monthly income. If the property is in my name, I can get a mortgage, pay back most of what I owe and collect rent to help pay the rest. My question is - how does this work tax wise? Right now the property is considered inventory for the LLC. If I go and transfer it in my name, it's no longer inventory on the LLC. But it can't just go away on my taxes? I was thinking I could buy it from my LLC, but then I would owe conveyance taxes on the sale. Any knowledgeable tax people out there that could explain how it would work?

Is your LLC a single member LLC? Just you on it?

If so nothing changes- it's ignored tax wise. 

If it's a multi member LLC/ Partnership/ Corp then there can be tax implications.

@Natalie Kolodij My LLC is a single member - just me. But I am confused as to how it is ignored on taxes. I bought the property under to LLC and rehabbed it under the LLC. If I claim it under the LLC when I bought and rehabbed it how can it be ignored? Because then in the same year that I bought it, I transferred it? Then there is no sale for the expenses to go against?

Single member LLCs are disregarded for federal income tax purposes. 

If it does sell it still gets reported on your 1040 Sch D

If it becomes a rental it reports on your 1040 Sch E

With regard to your taxes there is no difference if a property is in your name, or your single member LLC.

So there's no tax implication to what you're looking to do- you'll just QC the deed into your name from your LLC and refinance