RE Held In S-Corp

[Matt Inouye]

Hey BP Community,

Long story short... before BP I received some "bad" counsel from a CPA to put our properties in an S-Corp instead of an LLC (properties are in Sacramento California if that matters).

Fast forward 5 years and some of the properties have almost doubled in value.  I was looking to do a cash-out refi to take money out while locking in lower rates, but now that the properties are in the S-Corp, I am unable to transfer back into my name to refi without creating a taxable event.

I am wondering if there are any strategies to moving these out in a tax advantaged way (I expect there will be some cost to doing so).

Some strategies that have come up in other conversations are:

1) Form LLC and issue a note to the S Corp with the properties as collateral... then if S Corp defaults on the note... the properties will be transferred with out triggering taxes (although cost basis would remain the same)

2) Have appraiser apply discounted valuations on properties due to lack of marketability (I am only a 50% owner of the S-Corp).  Then transfer or "sell" property back into personal name and pay taxes on a discounted valuation.  If this is possible, how much a discount can be applied to the properties?

What say you BP Community... have you ever had a similar situation?

Thanks in advance!

Aloha,

Matt