What happens tax wise when switching property personal to LLC?

Question

Need to know the Tax implications of switching and how this is accounted for?

Bjorn Ahlblad · Answer

@Jason Crowe there are none.........an LLC is a Disregarded Entity for tax purposes. The LLC income is your income. This would probably be a good time to get a CPA. ;))

Natalie Kolodij · Answer

No capital gain.

No sale.

No taxable event.

Him and his SMLLC = the same person to the IRS.

Normally if you just QC the deed there is also no transfer tax.

Natalie Kolodij · Answer

His wording of personal LLC makes me assume it's his only.

No Pass through.

No K-1.

Danny Randazzo · Answer

@Jason Crowe you shouldn't have any tax implications but check with your CPA.

Michael King · Answer

For the experts here, is there a time limit after buying that you have to wait before transferring a property to an LLC? My banker suggested there was a 1 year time limit.

David Smith · Answer

Possible capital gain tax.

Account Closed · Answer

Michael is was in PA. I don’t recall the County but it was the county taxing authority... we did not complete the transfer and argued it was quick claim title only... they didn’t care... it’s a ‘transfer/sale’. I’ve had two bad experiences including one law suit in PA... I won’t do any deals there (just me). A few places I don’t do deals. I’m in TX, NY, OR and CA. Each has their own issues but just be educated and know all you can before you do a deal.

Account Closed · Answer

@Natalie Kolodij

Changing title can trigger a tax depending on jurisdiction. My client mistakingly bought property in its own name then went to switch it quick claim… To his LLC and was taxed $17,000…The jurisdiction considered it a sale so he stuck with the property in his personal name

Michael King · Answer

Scott where was this and you say he got taxed, so he stuck with it in his name. So did he actually get a tax bill? And if so, then that would only have occurred after transferring to the LLC, and not before, right? Surely the jurisdiction (are you talking a city, county, state?) didn't send him a tax bill before he transferred title. I'm confused as all get out, can you clarify your post for me please? I'm about to transfer 5 properties and don't need an $85,000 tax bill.

David Smith · Answer

Transfer tax.

What happens tax wise when switching property personal to LLC?

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