Surprise 17,000 Tax bill due to LLC transfer.

[Joe Black]

Hi this is my first post.

last year I created an LLC and move two properties into it, my wife and I own the LLC and we both owned the houses as well.

houses have been rentals since 2019, and LLC was created on 2023.

this year my CPA says I need to pay over 17,000 USD in taxes to the IRS because

"

This is a one time thing moving the properties to the LLC. What you are paying tax on is the recapture of the depreciation taken in the past. Moving the properties to the LLC the depreciation starts over at day one on 01/01/2023 when they were moved.

"

neither the real state attorney hired to create the LLC nor the CPA mentioned anything about tax implications when the company was created, I feel the 'experts' I paid for this services let me down.

any recommendations, or options to minimize the amount of money owed?

should I avoid this CPA and real state attorney in the future?

thanks for your help.

[Glen Wiley]

Have you asked them to explain why they didn't advise you of this?

In many situations where we are disappointed by a professional the best first response is to have a civil conversation. Your goal is to understand the situation fully so that you can make a wise decision about whether to continue doing business with them.

I often see folks fire people for a single mistake which is a tough way to operate. Nobody is perfect, every single person you deal with is going to make mistakes eventually. The key is how they handle their mistakes and whether the mistake is the result of incompetence.