Move property into LLC Name Help

[Jason Green]

Ok I had to dissolve an S-corp and opened as a single member LLC due to the loss of a partner. In the interim I bought a property. I am closing on it next week. I had to buy it in my personal name, which is fine, because I didn't have my LLC binder back yet.

Now I have all of that in place, I am trying to figure out from a tax standpoint what is best to do. If I rehab and flip in my personal name, I am going to pay massive capital gains tax because of my income.

Is there any advantage to deeding it to my LLC at this point or do I just suck it up and take the tax hit. If I could get it in the LLC name then I have 7 or 8 more months to expense out some of the profit from the flip.

My worry is, if I just deed it to my LLC, that may act as a transaction and I will pay personal tax on the gain anyway. I guess I could "sell" it to my company for what I paid and show no gain.

Any advice would be helpful. Hopefully I am making sense.

Thanks guys and gals as always.

[Louis Alvarez]

Jason,

A single member LLC (SMLLC) is disregarded for tax purposes so there should be no difference in the income tax to you whether you do or don't contribute the property. You need to engage a competent CPA who can go over "your" specific fact pattern with you and advise you accordingly. As they say, "the devil is in the details." All to often I have clients give me what they believe to be all the "facts" based on their understanding and then invariably something is different that changes everything.

You also need to check with a local attorney.  Although your "income" tax should not be different you need to make sure there isn't some type of transfer tax (document recording, etc.) that would be incurred by contributing the property.