It isn't clear to me what you are asking - what are your acronyms standing for?
In general, some tax issues to be concerned about are whether your income from the flip is ordinary income or capital gains, property tax and transfer tax to the extent that's a concern, etc. LEGAL issues also might include determining which entity type will be most effective for your goals, creating the entity or getting it into compliance (w suitable operating or buy-sell agreements, etc), and keeping title clear. You should hire a knowledgeable attorney to help you out.
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I agree your question is not clear. What is an FR remodel? It appears you may have a taxable event under the stated facts both as to income tax and a reappraisal for property tax purposes.
Why would you want to transfer the property to an LL for liability reasons if you're just flipping the house? Your best protection from a liability standpoint is insurance, not a separate business entity. I would personally seek legal and tax counsel before I gummed up the works.
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Transferring title of a property from your name to an entity in the name of you and your wife should not create any tax issues. Of course it would help to know, as the other two lawyers mention in their responses, what "FR" and "LL" stand for. Of course if you are talking about a tax deferred exchange under Internal Revenue Code Section 1031, then the change of title after the transfer would be a bad idea.