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If I transfer rental properties into an LLC, is it

If I transfer rental...

If I transfer rental properties into an LLC, is it considered a "sale" of property on my indiv taxes? Also, from that point do I then pay taxes from the LLC for these properties and do I get the same depreciation benefits?

Accountant's Assistant: What state are you in? It matters because laws vary by location.

I live in Wash DC but my properties are in AZ and NM

Accountant's Assistant: What steps have you taken so far?

I have an LLC but I haven't transferred any of the properties because I want to understand the tax implications first

Accountant's Assistant: Anything else you want the lawyer to know before I connect you?

I have not established any entities for the LLC (no bank account yet and have never filed taxes for it since I don't do any transactions for it). In the past since I've owned these properties I've filed them on my indiv returns

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Answered in 1 minute by:
3/20/2018
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Tax
Satisfied Customers: 2,766
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
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My name is***** will assist you today.

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When you transfer the property that you own, the transfer is not considered a sale and the cost basis along with the depreciation schedule, if any was being used, will also transfer to the LLC.

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If you are a single member LLC the tax implications will be exactly the same as they were when you were filing as a sole proprietor.

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Below is a link to a separate resource. Please let me know if you have any additional questions.

https://www.thetaxadviser.com/issues/2009/oct/contributionsofpropertytoanllc.html

"A contribution to an LLC taxed as a disregarded entity has no tax consequences because the entity is not considered an entity separate from its owner."

Please let me know if this has answered your question or if you have any additional questions.

When you have no further questions a positive rating of 5 stars is much appreciated.

Thank you!

Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Tax
Satisfied Customers: 2,766
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
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