Updated about 2 months ago on . Most recent reply
Transferring Primary Residence to LLC
Hello Bigger Pockets Fam,
I'm in need of some guidance in regards to transferring my primary residence to a LLC. The home is located in MI and I plan on moving to Chicago this summer. I still owe a mortgage on the home and don't want the due on sale clause to effect me if I do transfer the property. I would like it in a LLC to reap the tax benefits and not be personally liable for it. I know it is possible but would like advice on the best way to execute this. I'm thinking about talking to an attorney and having them walk me through the process. Has anyone done this before and what was the steps, cost, and requirements to perform this?
Most Popular Reply
Have you talked to your CPA? Depending on your situation, turning your personal residence into a rental, can be a bad financial idea.
If you still want to turn it into a rental...
"Reap the tax benefits" - Putting it into an LLC doesn't change a thing. Again, talk to your CPA
"not be personally liable" - If the mortgage is in your name, but the deed is in an LLC, are you treating this LLC like it is a separate entity, independent from yourself??? I've heard several attorneys argue that this pierces the corporate veil. If that is the case, putting the property in an LLC really provides you no liability protection either.
What you are proposing to do might make no sense financially or legally. Talk to your advisors.