Rental Property Investor · Perry Hall, MD · Member since 2016 · 586 posts · 598 votes
I am transferring title of a property from my LLC to my personal name for a cash out refi. The title company says that this is considered taxable in Maryland (as if it were a sale) and suggested I instead dissolve my LLC to accomplish the same thing. Does anyone know if they are correct? I am the sole member of the LLC. I was told similar things when initially transferring title to the LLC but my lawyer was able to find language to do so without having to pay taxes due to the fact that I was the sole LLC member. Dissolving/recreating the LLC is something I'd like to avoid.
i'm reaching out to that same lawyer with this question but wanted to ask here as well.
Rental Property Investor · San Diego, CA · Member since 2018 · 176 posts · 83 votes
7y
@Jon K. I can't answer specific to Maryland, but I did this in Virginia. It is risky because your bank could call the loan during the transfer. I'm guessing you are doing the transfer to drop your interest rate? I don't think you will pay taxes but if they do consider it a sale you would pay tax on the increased value depending on how much it has appreciated would determine the amount of tax. I hope that helps
Property Manager · Baltimore, MD · Member since 2014 · 1k+ posts · 1k+ votes
7y
I suggest you get an opinion from several different title lawyers. The laws change all the time and not all attorneys are as up to date on the latest, especially if it is outside of their area of expertise. Make a few phone calls to title (and tax!) lawyers and if they are all telling you the same thing then you can feel pretty confident that it is the right advice.