To Quit Claim to LLC or not?

[Nick Macklin]

I know there are some posts about this on the forum already but I hadn't seen any specifically about Florida. It also seems there are some different takes on it. During due diligence on multiple properties I have been looking at it seems very common for people to buy and then quit claim the deed to an LLC. This makes financing easier (**enter the due on sales clause arguments**) but I wonder about the commingling side of things and I am confused about how you account for it on taxes if you are a multi person LLC. Seems like things get confusing. Hopefully some of you can help me out since I have some offers drafted I just need to figure out what name they will go under!

[Randy Thomason]

Better be careful if ever audited. According to my CPA if you QC it to your LLC you will be doing one of two things. 1- You are making a capital contribution if you don't get paid for it or 2- you do a note from the LLC to you. An asset cannot just magically appear in your LLC. Assets are purchased for somewhat of fair value. Anything not purchased or a loan made to the LLC is a contribution.

Most will never have a problem but if you get an audit, the IRS will almost always catch you and make you account for it appropriately and that will bite you in the Butt!

and since it is a multi person LLC that makes it even more important that you account for it right or your "contribution" could be split multiple ways and you lose.