Selling to LLC for Capital Gains Exception

[Brendan Scully]

I have a rental that I lived in for two years. It has been a rental the last two years and I plan to sell it soon in order to take the capital gains tax exempt. However, I would like to keep it if possible. I have formed an LLC for future real estate investment. Can I "sell" it to my LLC at current market value with a quit claim deed and take the capital gains tax exempt?

[Steven Hamilton II]

Originally posted by @Zachary Bohn:

@Brendan Scully I believe there may be an exception that related party sales aren't available for the exclusion 

 Actually that is not entirely correct. There is some case law that does allow for such a sale. There is a provision for doing so; however, the specifics are fairly complex.  In addition it would require the use of a separate corporation. And corporations are not the best entity for holding rentals.