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May 22, 2024
Question

Tax consequence of contribute my house to my single member series llc

  • May 22, 2024
  • 1 reply
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Hi I would like to know the tax consequence if I contribute my house to my single member series llc in tx.thanks

1 reply

LindaSh
May 22, 2024

The IRS does not recognize the contribution of your home to a single member LLC (SMLLC) as a SMLLC is considered a disregarded entity which means that the entity is not separate from its owner. 

 

If the LLC is treated as a partnership or an S-Corp, then the property could be contributed to the LLC.  The tax consequences are governed by rules of partnership or corporations, respectively.

 

If the home has been converted from personal residence to rental property, then you could transfer it to the name of your LLC.   You would then need to file the appropriate transfer deed with your county and update insurance policies accordingly.  In addition, you would need to determine the basis of the property at the time of conversion.  You may also want to have a tax expert analysis the tax consequences and how it could affect $500,000 ($250,000 for single) exemption for personal residence.  The amount of time you held the property for personal use verses rental property could play a factor in the tax consequences.

 

Here is link to the IRS for further information:  https://www.irs.gov/businesses/small-businesses-self-employed/single-member-limited-liability-companies.

 

AICPA publication, The Tax Advisor link: https://www.thetaxadviser.com/issues/2009/oct/contributionsofpropertytoanllc.html