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Hi and welcome to our site!You absolutely may use a Quitclaim Deed as an instrument of conveyance of real property that passes the title from your name to the corporation.You may do same even if the property is used as a collateral for the mortgage - but in this case - you would need prior approval from the creditor.Since the property is not used as a collateral - no approval needed.In case the property is transferred to the corporation - that will be your capital contribution - and your basis in that property will be your basis in corporate shares.
After that income generated by these properties will be corporate income - and the corporation will file its own tax return - and will pay corporate income taxes.When you will transfer shares of corporation to your grandchildren - that will be a gift.
The gift itself - is not taxable income in the US. Please see for reference IRS publication 525 page 31 - left column - - http://www.irs.gov/pub/irs-pdf/p525.pdf
Gifts and inheritances. In most cases, property you receive as a gift, bequest, or inheritance is not included in your income. However, if property you receive this way later produces income such as interest, dividends, or rents, that income is taxable to you.So your grandchildren will not need to claim that gift on their tax returns - assuming the law would not change. There is no any amount limit. That is for income tax purposes. For gift tax purposes - that would be the donor who files form 709 - gift tax return - not recipients of the gift. The gift tax return is required when the total value of the gift is above $14,000 (for 2013) per person per year.There will not be any gift taxes unless the lifetime limit of $5,250,000 (adjusted every year for inflation) is reached.