Selling Fractional Shares of Real Estate on a short term rental

[Greg Teplansky]

So I am thinking about selling shares (in the future) of a vacation rental property I intend to buy very soon. I am wondering what the tax implications of this are? I intend to hold it in an LLC in the first place and then make the fractional buyers proportionate members/beneficiaries of the LLC. I think this would eliminate the possibility of triggering a "due on sale" issue because the property is already in an LLC and I am only selling interest in the LLC. Either way, would I be taxed at the normal capital gains rate (for me it's 15%) for each share that sells? Would myself and the other owners be able to utilize the STR loophole if it is used as a nightly rental? I would use a company versed in this process to manage the operations of the LLC and collect the rents/operating costs for the owners. I'd love to get schooled on this a bit if I'm totally outta my mind with this plan, but if there aren't a bunch of tax or legal roadblocks, I'm thinking it can work. I like the idea of selling shares to pay down the mortgage I'd have on it or use it for the next purchase, maybe a 1031. Please chime in and let me know what you all think. Thank you guys!