Sale of an income property from individual vs LLC

[Debra Martin]

My husband and I own a mobile home located on a plot we own, not in a park. We have had a tenant in it for the past two years. They have been wonderful and are interested in an option to purchase contract that we do not currently have set up. My husband and I are considering this as the mobile home is very old, and are aware that probably pretty soon some major repairs will be needed.

I'm wondering if it will be of any use to us to create our LLC (this is our only current income property) and transfer this property under it's ownership, or keep it as it is? We're trying to figure out what makes financial sense for this property. Based on last assessment it was at $40k which gives us about $20k in equity currently.

[Ashish Acharya]

Originally posted by @Debra Martin:

My husband and I own a mobile home located on a plot we own, not in a park. We have had a tenant in it for the past two years. They have been wonderful and are interested in an option to purchase contract that we do not currently have set up. My husband and I are considering this as the mobile home is very old, and are aware that probably pretty soon some major repairs will be needed.

I'm wondering if it will be of any use to us to create our LLC (this is our only current income property) and transfer this property under it's ownership, or keep it as it is? We're trying to figure out what makes financial sense for this property. Based on last assessment it was at $40k which gives us about $20k in equity currently.

 Might be good idea from legal perspective if everything is handled correctly, but not tax difference either way. 

You will end up paying more via LLC considering expenses associated with forming LLC and maintaining it.