Capital gain tax exclusion after property transfer to LLC

7 Replies

I have lived in primary residence for just over 2 years and rented it for another 2 years. When I started to rent out, I moved my property to LLC using general warranty deed, and now I'm planning to sell my home as I have lived in house for 2 years of last 5 years. If I sell the home via LLC, will I qualify for the capital gain tax exclusion as lived in it for two years before transferring it to LLC. Do you have to transfer it back to my name?

Interesting. You "sold" it two years ago, already. If you "bought it back" now, you may have a new 2 year clock. I honestly don't know but I'll watch for a knowledgable answer.

@Raj Kumar you do not own the house a company does. I do not believe you can get the exemption for sale of primary homestead. I am not an expert in this area though, Maybe @Steven Hamilton II can help us out on this. He is an expert. You always need to check with your tax accountant before you do something, not after.

Assuming that you did not contribute that property to a partnership or other and yes it would still qualify as the LLC is considered a disregarded entity. You are the beneficiary of the LLC.

Steve, thanks for helping out. I know better than to comment on areas I know little about.

LLC is partnership just me and my wife.

Originally posted by @Raj Kumar :
LLC is partnership just me and my wife.

At that point you have a problem as the Entity is not acting as though it is you personally. I would have to double check my thought process; however, This is one of the reasons I don't recommend holding personal rentals in an LLC if you know that is a possible case. Who advised you to contribute it to an LLC?

If I remove my wife from LLC, will that help? What options I have?

Can I change title back to my name from LLC?

Need advice on how to handle this.

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