Most tax-efficient way to take property out of LLC?

3 Replies

Hello - we have a small two person LLC which holds a single, small, paid-off property. We would like to move the property from the LLC to our personal names. Is there a way to do this without any adverse tax consequences?
Originally posted by @John Anderson :
Hello - we have a small two person LLC which holds a single, small, paid-off property. We would like to move the property from the LLC to our personal names. Is there a way to do this without any adverse tax consequences?

Taking out properties from partnerships (LLC) is not taxable transaction. You just have to make sure the distribution is reported correctly on the books and the tax return.

Originally posted by @John Anderson :

@Ashish Acharya thank you for responding! I’ve heard that the distribution will lower your cost basis in the property? Is this true, and if so is there any way to avoid this?

No, it will not lower it unless your outside basis in the partnership is lower compared to the basis of the asset in the partnership. These are tax technical stuff and you need to really work with your CPAs. That is why you are paying them.