Rental Property QC'd to LLC

Forum|Forum|2 years ago
March 15, 2024
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When we QC'd our properties to our LLC, does the IRS look at that as being sold or do we treat it or answer the questions as if we are still the owners?

PatriciaV

Employee

If the ownership/title of the properties changed, you would answer questions on your 1040 return only for the period when you personally held and rented the properties.

A Quit Claim to an entity that you own is a contribution to the LLC. You transferred the title for zero dollars and gained an investment in exchange for the properties. Because the IRS rules allow this transfer to occur without taxable income to the member or the LLC, you may report this as a sale for an amount equal to your adjusted basis at the time of the transfer. The LLC records the property at the same adjusted basis.

For a complete discussion, see this authoritative source: Contributions of Property to an LLC

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