Investor · Ridgefield, NJ · Member since 2016 · 19 posts · 0 votes
Hi, I have purchased a 3 unit multi fam property under LLC (50/50 partnership husband and wife in NJ which is Non-community state) and financed (100%) through hard money lender(personal guarantee). After the rehab was finished we did a quite claim deed to personal name since that was the only way bank can refinance the loan as conventional investment loan. We now lsited the property for sale and we currently own it under our personal name after refinance. (so LLC does not own property
What are the tax impacts? I have met several CPAs but they say they are not sure. rehab cost was big due to contractor causing delays here and there so I am not expecting much return but at least I wanted to understand potential tax impact
Not sure why your CPAs struggled. It's not that complicated. The IRS will be looking for the sale of this property on your personal tax return, since it will be sold under your personal names and SSN.
Husband-wife LLC can be disregarded for tax purposes, and the flip reported directly on Schedule C (or Sch E if it was rented) of your personal joint tax return, without a separate tax return for the LLC.
It can only get complicated if you and your wife file separately, or if you have some reason to file a separate tax return for your LLC.
Not sure why your CPAs struggled. It's not that complicated. The IRS will be looking for the sale of this property on your personal tax return, since it will be sold under your personal names and SSN.
Husband-wife LLC can be disregarded for tax purposes, and the flip reported directly on Schedule C (or Sch E if it was rented) of your personal joint tax return, without a separate tax return for the LLC.
It can only get complicated if you and your wife file separately, or if you have some reason to file a separate tax return for your LLC.
Hi Michael, Thanks for the reply. We are filing jointly. Sounds like you mentioned qualified joint venture or filing two schedule Cs. We live in NJ which is not a community state. Is that still possible?