Conveyance Tax Question - State of CT

[Chris C.]

Our LLC will be purchasing a single family property next week for $200K in the State of CT. We have a buyer (under contract) with a target close date of June 15th (or sooner) to purchase the house for $125K. Since we are buying the house and the seller next week is paying related taxes is their a loop hole that can help us avoid paying a conveyance tax since the property will be flipped 3-4 weeks later? I've looked at the states conveyance tax law and can't find a grey enough area that this would fall under. Any help would be greatly appreciated.

Please do not focus on the loss on the transaction (other than it impacting the conveyance tax).  This is part of a larger deal that is selling.  We purchased a 8,000sqft warehouse and the single family house is the property next door that we are picking up in the deal.  The $75K loss shifts to the warehouse that has been rezoned and approved to become 14 apartments in a TOD zone.

[Ashish Acharya]

Originally posted by @Chris C.:

Our LLC will be purchasing a single-family property next week for $200K in the State of CT. We have a buyer (under contract) with a target close date of June 15th (or sooner) to purchase the house for $125K. Since we are buying the house and the seller next week is paying related taxes is their a loop hole that can help us avoid paying a conveyance tax since the property will be flipped 3-4 weeks later? I've looked at the states conveyance tax law and can't find a grey enough area that this would fall under. Any help would be greatly appreciated.

Please do not focus on the loss on the transaction (other than it impacting the conveyance tax).  This is part of a larger deal that is selling.  We purchased a 8,000sqft warehouse and the single family house is the property next door that we are picking up in the deal.  The $75K loss shifts to the warehouse that has been rezoned and approved to become 14 apartments in a TOD zone.

Is this located in an enterprise zone or an entertainment zone? You could potentially get the exemption for that. 

Sometimes, you can sell the LLC interest to avoid these taxes but CT also has controlling interest taxes. If you sell more than 50% of the interest, another tax could potentially be more than conveyance tax.

If your tax was at 2.25% percent, you can take the credit against the property taxes too. But I don’t think this applies to you.  

There might be a ways around this if sell this in more than 6 months interval and sell less than 50% LLC interest each time. We are not talking about huge tax here so the analysis with your CPA might cost more than tax, honestly.