TItle in personal name but expenses paid by LLC

[Tracey Hamilton]

When doing our first flip project, we purchased the home in our personal names. 

We used money from our LLC account for the purchase, but IIRC the actual cashier's check to title company was in our personal names.

We used the LLC to purchase the vast majority of the materials and supplies for the rehab.

We did also use a Home Depot credit card in our personal names for some of the materials and supplies.

When house sold, it was sold under our personal names, and the check from title company first deposited to our personal checking account, then transferred over to LLC account.

QUESTION: Because we failed to title the property in the LLC name, is there any way the IRS can choose to exclude the rehab costs from increasing the basis of the home?

LLC is a 2-member LLC.

THANKS! 

[Jaysen Medhurst]

@Tracey Hamilton, I don't think your issue is going to be the IRS. A LLC is a pass-through entity, so everything ends up flowing to your personal taxes.

Your real issue is that the co-mingling of funds is a big no-no for asset protection. It allows the "piercing of the corporate veil." If you were ever sued, an attorney could argue (correctly) that the LLC didn't really exist as a business entity and therefore can't offer protections.

Seems like this deal is behind you now. Take it as a learning experience and clean up your bookkeeping practices.