Question for the lawyers and CPAs (property to an LLC)

Contribution of property to a single-member LLC should be a non-taxable event. Unless you owe more than the property is worth, you have no gain recognition issues, and the basis for the property in the LLC is the same as your basis. The only issue for such a transfer is generally with the lender who might not agree to having the property retitled in the name of the LLC. You can usually work around this by personally guaranteeing the loan as the lenders understand the liability protection benefits of LLC ownership.

yea you can donate it

just have to make sure the donation is done by authentic act

(notary, 2 witnesses, etc...)

quote:

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So a donation would work?

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I believe a donation could have tax consequences. You want to do a 'contribution.' I assume you are going to have a title attorney handle this and he will (or should) know what you need. If he doesn't you may want to walk, not run, to another title company.

You cant just "donate" it if you want it to be a tax free transaction. You would need to "contribute" it and recieve an interest in the LLC in order to stay tax free. Jump in if I'm wrong Poodle.

I think people are considering a donation = a contribution. A donation is something different entirely and has tax ramifications. A contribution to the LLC would likely be a non-taxable event.

Simonizer is right here. There's a lot of fail in this thread, much like the ORRI thread. Sadly, some of these posters practice law

A single-member LLC can elect to be treated as a corporation for tax purposes, and then make another election to be an S corporation. If so, then there could be unintended tax consrquences, such as built-in gains tax potential. (This is more common for personal service businesses, but it wouldn't make much sense for the OP).

but BIG tax would only be on the appreciation from the time he elected C status until the time he elected S status.

i'm just trying to figure out what you meant in your original post about there being an issue with contributing property that is mortgaged for more than its FMV to a single owner llc.

tax court would say that the single member llc is indistinguishable from its owner.

it is their rule.

I tell you what, if you want to chance the tax court because you want to have a donation drawn up instead of a contribution than be my guest. I can't imagine why you would do that when its as simple as executing and recording a different document. But you go right ahead. *Not legal advice*.