We are foreigners who own an LLC that owns a townhouse in MI. We formed the LLC be able to gift interests to our children, since there is very little estate? tax exclusion (60K$) for foreigners.
My question is how can we do it (any form or a simple letter) and if I still need to fill Form 709? We can remain well-within the limits of the gift tax exclusion by using the purchase price etc (lower than current value), in order to keep it as simple as possible.
Help would be greatly appreciated from any MI or other tax/law experts.
Michigan's gift tax exclusion limit is $15,000 per recipient. Therefore, to minimize your tax exposure, divide upon as many recipients as it takes. I hope this helps.
Ownership in an LLC is typically determined by an operating agreement. So you need to ensure that your children are eligible to receive the membership interest and execute a modification to the operating agreement. This then becomes a potential accounting issue for tax purposes.
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