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

Asked about 1 year ago - 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. Daniel Boyd Waters

    Contributor Level 10

    7

    Lawyers agree

    Answered . 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... more
  2. Michael T Millar

    Pro

    Contributor Level 19

    4

    Lawyers agree

    Answered . 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... more
  3. John P Corrigan

    Contributor Level 19

    1

    Lawyer agrees

    Best Answer
    chosen by asker

    Answered . 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... more
  4. Cheryl Rivera Smith

    Contributor Level 20

    3

    Lawyers agree

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

  5. Robert V Cornish Jr.

    Contributor Level 16

    1

    Lawyer agrees

    Answered . 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... more

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