getting ready to sell, should I transfer the asset to my LLC?

Question

After a long process, I am ready to put my reno on the market. Bought with cash. Should I transfer the asset to my newly created LLC and sell from the LLC, or keep in my name? Is there a benefit to either? Thanks for the assistance!

Basit Siddiqi · Answer

@Mike Weaver - There will be no benefit of transferring the title over to an LLC before sale. You will be entitled to the deductions as if it was sold in your personal name.I would argue that it will be more costly since you have to pay a title company to transfer the title

Basit Siddiqi · Answer

@Grant Miller - There should not be a difference between selling the property in your personal name or inside of an LLC (I assume single member LLC(owned by one person) taxed as a disregarded entity(didn't select the option to be taxed as a corporation)). The passive losses that you accumulated over the years will net against your profit upon sale.If anything - I would assume that transferring the title to your personal name would be more costly since you would have to pay a title company to transfer the title.I am curious on what you ended up doing.

Grant Miller · Answer

I am in the reverse situation - purchased for cash in the LLC and currently listed for sale. I asked my accountant and he said we should talk and see if it makes sense to move the house into my personal name before selling. I have some long term losses Ive been carrying forward for a few years so I am looking to write off any profit against that if possible. I would recommend you meet wth your CPA.

Mike Weaver · Answer

Hi, David, there's no financing on the house, it was paid in cash.

David Dachtera · Answer

@Mike Weaver,

It depends.

The existing financing is likely in your name. So, it effects your credit.

Ask your legal and financial professionals whether the profit from the sale would then help capitalize your LLC. If so, that would be a step toward the LLC getting it's own credit.

That said, though, they may likely advise that short term holds should be done in an S-Corp. Your LLC can simply take the "S"-election or you can form an S-Corp before selling and deed the property into it before accepting an offer. Warranty deed only, please. Quit Claim can cause problems.