Skip to content
×
Pro Members Get
Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 16%
$32.50 /mo
$390 billed annualy
MONTHLY
$39 /mo
billed monthly
7 day free trial. Cancel anytime
×
Take Your Forum Experience
to the Next Level
Create a free account and join over 3 million investors sharing
their journeys and helping each other succeed.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
Already a member?  Login here
Tax, SDIRAs & Cost Segregation
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated almost 3 years ago on . Most recent reply presented by

User Stats

2
Posts
0
Votes
Jaxon Drake
0
Votes |
2
Posts

The Tax Effects of Quit Claiming a deed from our LLC to ourselves

Jaxon Drake
Posted

Hello everyone,

I'm a longtime lurker of BP and have never needed to post till now.

I think I might have screwed up my wife's and I's taxes for one of our rental properties.

We bought it in Phoenix, Arizona in 2014 and earlier this year we took advantage of raising property value prices and cash out refi'ed our rental property.

In order to do so we quit claimed the property from our LLC to our personal names.

We will keep it in our personal names for the foreseeable future.

We are the only members of the LLC.

However, I didn't think about taxes and so now I am nervous regarding the following topics:

1. Does quitclaiming cause an increase in property tax basis? We bought the property for about 150k in 2016 and now it is worth 600k according to the bank (cash out refi cost basis value). The property taxes are capped at a certain amount increase per year, so our property taxes are very low. 


Will the quit claim deed accelerate our property taxes to the current assessed value because the owners have changed (Our LLC to Us) bypassing the annual property tax cap and causing us a big increase in annual property taxes because of a new assessed value?

2. Do we have to pay taxes on the property coming from the LLC to our personal names? Since it is "worth" a lot more now do we have to pay income tax, etc?


Thank you so much, I am a huge fan of BP and all you all have helped us so much.







Most Popular Reply

User Stats

4,114
Posts
3,281
Votes
Ashish Acharya
#2 Tax, SDIRAs & Cost Segregation Contributor
  • CPA, CFP®, PFS
  • Florida
3,281
Votes |
4,114
Posts
Ashish Acharya
#2 Tax, SDIRAs & Cost Segregation Contributor
  • CPA, CFP®, PFS
  • Florida
Replied

1) No it does not increase the basis. 

2) No you don't have to pay taxes when you distribute the asset to your name from your LLC

These need be properly recorded on your partnership tax return and close out the partnership. How you close out the partnership return will determine your basis on the distributed asset.  

business profile image
INVESTOR FRIENDLY CPA®
4.9 stars
217 Reviews

Loading replies...