As part of my estate planning cleanup, I need to transfer a rental property from my WY LLC to a new NC LLC (both LLC's to be taxed as disregarded entities). My name will NOT be on the new NC LLC...the single member of the NC LLC will be my WY LLC (of which I'm the single member).
Will this change of title be a taxable event given my name will not be on the new NC LLC that the property is transferred into?
This is a question appropriate for your Estate Planning attorney to answer as they were the ones who advised you around your Plan and should be able to opine on the tax consequences of the plan.
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I don't know WY law or NC law, so this answer is based on general federal tax principles only.
If you were the sole owner of a property that transferred that property into an LLC, were the sole owner of the LLC, and then transferred that property out of the LLC back to you, then there's no recognition of gain for federal tax purposes. If you then transfer that interest into a NC LLC where you are the sole owner, then there's generally no recognition of gain for federal tax purposes. If you skip that middle step and either merge the WY into the NC LLC, or do what's known as an F reorganization (IRC 368(F) - which is basically changing the jurisdiction of organization), there's no gain recognition. However, doing the merger or reorganization is a little more involved.
WY and NC law will affect whether there are transfer or recordation taxes due (that's different from income tax). You need someone in WY and NC for those questions.
Please note that it is impossible to provide full and complete answers based on the limited information provided. Consequently, this information is general in nature and should not be considered legal advice.
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