When real estate is held by an LLC of a husband and wife in a community property state, and then sold at a profit after being held for at least one year, does the LLC qualify for Capital Gains Treatment of the gain? How exactly does the gain "pass through" to the personal tax return as a capital gain?
Does the LLC in any way affect the capital gains rate paid? Does the LLC HURT in any way the possible capital gain?
Would the capital gain be better if taken solely as an individual (non llv) ownership of tjhe entity?
Real Estate Investor · London · Member since 2008 · 3k+ posts · 74 votes
18y
Originally posted by "tmoneynow":
When real estate is held by an LLC of a husband and wife in a community property state, and then sold at a profit after being held for at least one year, does the LLC qualify for Capital Gains Treatment of the gain? How exactly does the gain "pass through" to the personal tax return as a capital gain?
Does the LLC in any way affect the capital gains rate paid? Does the LLC HURT in any way the possible capital gain?
Would the capital gain be better if taken solely as an individual (non llv) ownership of tjhe entity?
A single member LLC is treated as if it does not exist when taxes are filed. A multi-member LLC (husband and wife or any two people/entities) does not fit this. Hence you could elect to be treated as a partnership for tax filings. Or you can be tax differently. It depends on how the LLC was set up.
For the most part an LLC is fine for holding appreciating assets (RE and other things). You just need to hire a competent tax advisor to tailor things to your situation. Note that some income might be best run through a different entity so that you can provide company benefits to employees (medical, dental, vision, auto, life insurance, pension).