In general contributions into an entity do not trigger a taxable event.Doing it prior to sale leaves you open to issues of intent and holding period and the thought that you're somehow hiding gain somewhere in the entity transfer.  

However, this new buyer is threatening to get attorneys involved because he seems to think that this is not a encroachment granted in perpetuity.I think my folks are in the clear on this due to the nature of the language in the agreement but the last thing I want to have happen is get lawyers involved and have them have to pay to move the tank since, technically speaking, they are in the wrong.Don't have any experience/advice in this matter?

Property / Finance details here with comments below.Address: 2626 NE Multnomah St, Portland, OR 97232Property Notes: large basement but ceiling too low, could be zoned into duplex, gutters not attached, evidence of plumbing issues, backs directly to freeway, noise is very present, tenants don't mind noise.  1 squatterPurchase price 337kLiens aka Cash needed - 66kRepairs needed est - 10kRent estimated - $2,300/monthMy number crunch viewable at this linkhttps://docs.google.com/spreadsheets/d/1FJlTFIbInZ...I love the area for appreciation.

There are a few more cosmetic issues that I'll need to deal with, but probably no more than $500 worth of materials and labor. 

@Deddy W. this is definitely an issue for your attorney to handle.

The LLC (being taxed as a partnership), will report the property's gain on its LLC tax return and will issue Schedule K-1's to each partner/member reflecting each partner/member's allocable share of the property's gain.The LLC (again taxed as a partnership), will not actually pay any tax, the LLC partners/members will actually pay the tax on the property gain at their reporting level based upon what was reported to them on their respective K-1's.

I have been having issues finding a commercial lender to help me with these in my situation.Any advice or connections to a good commercial lender who can help would be much appreciated.

With buyers agents saying the appraisal might be an issue, and you have no listing agent...Im sure then there is 100% chance this doesnt appraise.

It will depend on if they will be willing to issue a supplemental loan to increase proceeds.

Financing may also be an issue, depending on how picky the bank wants to be.