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How to transfer the investment real estate ownership from LLC to members personally and avoid or minimize the costs and taxes?

Huntington Station, NY |

My wife and I own a 2-member LLC that owns a real estate property used for rental income. We'd like to cease using it as a rental, renovate and move in. There is no loan or mortgage associated with it. How can we transfer the ownership from the LLC to ourselves to keep the costs and taxes on the minimum, and what would be the tax consequence, if any? Would there be any other undesirable consequences?

Attorney Answers 5


  1. Best answer

    The technical issue is the adjusted cost basis you take in the property upon distribution to you on a dissolution of the LLC. Your tax basis in the home will be a function of what your basis was in your membership interest which gets swapped essentially for the home. Your CPA will need to do the calculations of the transferred basis you will have in giving up the llC interest in exchange for the property itself.

    My answer is not intended to be giving legal advice and this topic can be a complex area where the advice of a licensed attorney in your State should be obtained.


  2. You should really seek the services of an accountant and/or a tax attorney. It sounds like you want to liquidate and dissolve the business. This activity can have tax consequences, but it is very fact specific.

    This is not legal advice nor intended to create an attorney-client relationship. The information provided here is informational in nature only. I may not be licensed in the jurisdiction which you have a question about so the answer could be only general in nature. Visit my website: www.waterstaxlaw.com


  3. You really need the help of a CPA with this one. There are many other factors to consider.


  4. I agree with my colleagues - this question should be directed to your CPA.

    If this answer was helpful, please mark it as helpful or as a best answer. This answer is for general education purposes only. It neither creates an attorney-client relationship nor provides legal guidance or advice. The answer is based on the limited information provided and the answer might be different had additional information been provided. You should consult an attorney.


  5. In addition to a CPA, you should also contact a good trusts/estates attorney to ascertain what trust structures might be appropriate for your situation.

    The foregoing is not legal advice nor is it in any manner whatsoever meant to create or impute an attorney/client relationship.

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