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I want to create an LLC in Utah and then hold a building in

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it. I will be the...
I want to create an LLC in Utah and then hold a building in it. I will be the 99% member of the LLC and my brother in law, a 1% member. Half of the building I will rent and half I will own outright with my payment of a substantial sum of money to the current building owner. If I transfer my 50% ownership of the building into the LLC, will I have tax issues I will need to deal with?
Submitted: 1 year ago.Category: Business Law
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5/26/2016
Business Lawyer: Richard, Attorney replied 1 year ago
Richard
Richard, Attorney
Category: Business Law
Satisfied Customers: 55,810
Experience: 32 years of experience practicing law and a businessman.
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Good afternoon. My name is ***** ***** I look forward to helping you.

No, transferring 50% of the building will not result in any tax consequences. The contribution will be a non-taxable transaction under either Section 351 or Section 721 of the Internal Revenue Code, depending upon whether you elect for the LLC to be taxed as a corporation or a partnership. But, I do wonder why you want to retain 50% of the building in your own name. The LLC's limited liability status protects your personal assets from liabilities of the LLC; if you retain 50% in your own name, to the extent of any problems or lawsuits involving the building, you would be personally at risk.

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Customer reply replied 1 year ago
Thank you. I don't own the other half of the building yet. I only rent half for my business. I own half of the building outright. So in trying to make sure I understand, transferring a real estate asset into my LLC will not trigger tax consequences?
Business Lawyer: Richard, Attorney replied 1 year ago

Yes, that is correct. It's a non-taxable transaction.

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Business Lawyer: Richard, Attorney replied 1 year ago

I just wanted to let you know that I will be away for the evening. Should you have a follow up while I’m away, I will address it first thing tomorrow morning. Thank you in advance for your patience. I apologize for any inconvenience.

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