Property transfer from personal to LLC to personal

[David Lee]

I have a remodel property project that I am planning to switch under single owner 100% LLC and get private financing to finish the project. I am out of funds and I can get the financing only under LLC. Once I am finished and if the house is not sold quickly, I would like to switch under my name quickly and refinance it at lower conventional rates as my homestead. I will be then occupying the house for few years before selling it. Will I have a problem changing from LLC to personal homestead and will it cost me any additional taxes?

[Jonathan Kincaid]

An attorney can perform a "quit deed" or "warranty deed" for you, which will transfer the asset from your LLC to your name, or vice versa. The deed transfer does trigger a taxable event, which you will pay for in "tax stamps", if you have a mortgage on the property. The amount of the tax stamp is determined by a percentage of the loan you have on the property. Be careful to not trigger the "due on sales clause". For example, if a lender lent your LLC the money to acquire the asset, if you transfer the asset to your name, from the LLC, the lender has the legal right to call you on your note, thus demanding that you pay the entirety of your outstanding mortgage, upon sale.