Buy the LLC or buy the apartment

[Eugene Mar]

Hi,

Wondering if someone has some good insight to this.  I am thinking of purchasing a large apartment complex that has been owned and operated by the same family for over 30 years.  The properties have no mortgages.  

Initially I was going to use my company to buy the buildings but now I am thinking if there is an advantage to buying the shares of their company instead.  With over 30+ years I am sure the company will have good credit history.  Perhaps I can use that to my advantage on my next acquistion.  Of course, I will need to make sure that they are current on taxes and there are no liens or judgements.

Any comments will be appreciated.

[Wayne Brooks]

Other than the unknown risks you eluded to, one problem jumps out at me.  If you buy the entity that owns the property....the property has already been depreciated to $00.00, or close to it, which will be Your basis, which eliminates any depreciation on the "purchase price" and 100% capital gains tax on any future sales price.  Doesn't seem attractive, unless I'm way off.   Just noticed the BC, this would be for US.