Innovative Strategies

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Mak K.
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Transfer SF Rental from one LLC to another LLC- Procedure

Posted Jun 8 2022, 07:21

Hi,

I have a property rental in one LLC and taxes are under those LLC. I need to tranfer that property to another LLC name and going forward it will file taxes under that name.

How does the transfer work? What happens to the depreciation, cost basis on the tax returns etc. FYI property is 3 year old

Houston, Texas

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Curt Smith
  • Rental Property Investor
  • Clarkston, GA
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Curt Smith
  • Rental Property Investor
  • Clarkston, GA
Replied Jun 9 2022, 07:33

BTW to the county that is a sale and is fraud to not pay the xfer taxes due.  in some states like CA/FL that tax is significant.

If both LLC are pass through (not s-corp/c-corp) then its not an IRS sale since both funnel down to your personal 1040. BUT if one is an S-corp you do have IRS tax implicatioons.

IFF both LLCs are pass through, then answers to your qs are; nonthing happens since both LLCs pass through to your 1040's sched E as if nothing happened.  JMO,  best to NOT ask the "internet" re these important tax implications.  Ask your CPA/real estate tax expert.  

Just fyi, curt

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Nancy Truong
  • Attorney
  • Houston
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Nancy Truong
  • Attorney
  • Houston
Replied Jun 10 2022, 23:27

I'm assuming you're only asking about LLC transfer for tax purposes. But if you're also asking for a title transfer it would be through the real property records. If it's for title transfer, you'll need to transfer the warranty deed, whether its' general, special or quit claim deed. You also should clear title by paying off any liens.

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Basit Siddiqi
  • Accountant
  • New York, NY
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Basit Siddiqi
  • Accountant
  • New York, NY
Replied Jun 30 2022, 13:38

There will be transfer basis from one LLC to the other.

There will also be a distribution from one LLC to you
Then there will be a contribution by you to the other LLC.

You will need to properly keep track of your basis in both LLC's.

Best of luck!