Re: Real Property Transfer to LLC

#3 09-03-2003, 07:01 AM

iforsyth wrote:

- quote -

> The LLC would not be setup for my consulting business. I
> would keep the consulting business where it is today. The
> LLC would be setup exclusively for the real estate business.

If the LLC does not elect to be taxed as a corporation you
would report the rental activity on Schedule E as if the LLC
did not exist. If there is no LLC and you own the rental
assets directly, you would report the rental activity on
Schedule E .

Regards,
Bill
~~~~
Associate Professor of Accounting
Longwood University
Department of Accounting, Economics & Finance
http://www.longwood.edu/staff/wpbrown/
Opinions expressed by me are mine, not my employer's.

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#2 09-03-2003, 07:01 AM

"iforsyth" <dontspammenow[at]yahoo.com> wrote:
- quote -

> "Dave Woods, EA" <d.woods[at]verizon.net> wrote:
> > "iforsyth" <dontspammenow[at]yahoo.com> wrote:

> > > I currently have a sole-proprietorship consulting business.
> > > I just bought a rental property. I would like to setup an
> > > LLC for the rental property. The LLC will take some time to
> > > setup.
> > > > > Can I hold the rental property under the sole proprietorship
> > > and do the bookkeeping there until the LLC is formed, and
> > > then transfer the property into the LLC? What are the tax
> > > implications of this move? Is it no different than me
> > > personally transferring property to the LLC, or is it
> > > different because the property is held by a business and
> > > being transferred to another business?

> > First of all, I would question the wisdom of creating an LLC
> > for a business then adding another activity (rental
> > property) to it. As to tax implications, there are none.
> > The LLC is a single member entity and is transparent for tax
> > purposes.

> The LLC would not be setup for my consulting business. I
> would keep the consulting business where it is today. The
> LLC would be setup exclusively for the real estate business.

There should be little problems from a tax standpoint in
this transfer, though I would suggest you speak to the local
tax assessors office about any necessary fees to transfer
the title. You may also have to talk to your lender about
the loan.

Remember that a SMLLE is a disregarded entity for tax
purposes, so you will still file a Schedule E with your
1040.

Gene E. Utterback, EA

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#1 09-01-2003, 10:57 AM

"Stuart O. Bronstein" <stu[at]lexregia.com> wrote:
- quote -

> "Dave Woods, EA" <d.woods[at]verizon.net> wrote

> > First of all, I would question the wisdom of creating an LLC
> > for a business then adding another activity (rental
> > property) to it. As to tax implications, there are none.
> > The LLC is a single member entity and is transparent for tax
> > purposes.

> Unless the LLC is taxed as a corporation.

True but people with a single member LLC don't refer to it
as such if its taxed as a corp.

--
David M. Woods, EA
Boston, MA 02109

Postings here are general information only and not to be
relied upon as advice.

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08-31-2003, 09:55 PM

"Dave Woods, EA" <d.woods[at]verizon.net> wrote

- quote -

> First of all, I would question the wisdom of creating an LLC
> for a business then adding another activity (rental
> property) to it. As to tax implications, there are none.
> The LLC is a single member entity and is transparent for tax
> purposes.

Unless the LLC is taxed as a corporation.

Stu

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#-1 08-30-2003, 06:00 AM

"iforsyth" <dontspammenow[at]yahoo.com> wrote:

- quote -

> I currently have a sole-proprietorship consulting business.
> I just bought a rental property. I would like to setup an
> LLC for the rental property. The LLC will take some time to
> setup.
> Can I hold the rental property under the sole proprietorship
> and do the bookkeeping there until the LLC is formed, and
> then transfer the property into the LLC? What are the tax
> implications of this move? Is it no different than me
> personally transferring property to the LLC, or is it
> different because the property is held by a business and
> being transferred to another business?

First of all, I would question the wisdom of creating an LLC
for a business then adding another activity (rental
property) to it. As to tax implications, there are none.
The LLC is a single member entity and is transparent for tax
purposes.

--
David M. Woods, EA
Boston, MA 02109

Postings here are general information only and not to be
relied upon as advice.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

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