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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10108
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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If my real estate LLC sells property and I 't accept the

Customer Question

If my real estate LLC sells property and I don't accept the distribution until next year, do I have a tax liability this year?
Submitted: 5 months ago.
Category: Tax
Expert:  Lane replied 5 months ago.

Hi,

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So sorry, yes.

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All passthroughs - sole proprietorships, LLC's not taxed as C-Corps, and S-Corps - are taxed on profits and capital gains in the year the transactoin happens.

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The other side of that same coin is that distributions are not taxed, becasue they were (or will be in the current year) taxed as profit.

Expert:  Lane replied 5 months ago.

If you're a SINGLE member LLC, then you are what IRS calls a "disregarded entity," filing a schedule C for your income and expenses (just as a sole proprietor).

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But the capital gains will be taxed on your personal schedule D, form 1040

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The LLC still provides that corporate level liability protection and is considered a separate entity for YHAT purpose, at the state corporate and creditor law level.

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But the LLC is ess entially you (for TAX purposes)

Expert:  Lane replied 5 months ago.

Please let me know if you have any questions at all.

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If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the faces or stars on your screen, and then clicking “submit")

JustAnswer will not credit me for the work unless you do.

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Thank you!

Lane

I have a law degree, (Juris Doctorate), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in financial accounting & tax, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986

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