Sell primary home to LLC for Bus Econ Purposes + Section 121

[Molly Jacobsen]

Can I legally sell or transfer (which is best?) my primary home to my LLC (that already contains 11 uniits) without losing my Section 121 benefits (capital gains exclusion)? Lived in home 2 of last 5 years. Now converting to rental for a positive cash flow of $1500/mn, continuing to build portfolio, and developing land home sits on (zoned for 40 units). After selling to the LLC, we would subdivide and develop it. ( am an active real estate professional, spending 15-20 hours/week on the rentals. Also, for economic purposes, by placing home in LLC (a business), children will be elgible for more college financial aid since the business assets for a closely held company with few employees are exempt/not counted under federal financial aid laws but are counted when it is our personal name. Since we are selling it to the LLC and/or transfering it (as a capital contribution) Would basis be FMV or adjusted basis considering depreceiation? Pd 80K. Owe 160K. FMV is about 450K. Lastly, would I lose the Section 121 benefits? Do I need an arm's length transaction(Section 482) and if so, how do I do that?