Moving property ownership from an LLC to an individual can be a confusing process to manage on your own. You are going to need to have the assistance of a real estate attorney who is familiar with these types of transfers and the tax consequences that go along with moving property ownership from an LLC to an individual. Depending on the type of LLC that you have owned the property under, it could be imperative that you utilize the correct LLC type in order to keep the most money in your pocket as possible when it comes to performing the move.
A Limited Liability Company may be the best form of business entity for you depending on the types of businesses that you are wanting to do. Having an LLC is better than incorporating for the sake of obtaining personal liability shielding. It will allow you to take advantage of the tax breaks that corporate structure allow while enabling the business to be managed with a simple contract. This allows you to join all of the different needs of your businesses, such as holding real estate, operating businesses and the like.
Moving property ownership from an LLC to an individual is a common enough practice, especially if you are attempting to transfer ownership to a separate individual. There are multiple reasons that this may occur, and depending on your personal and financial situation, there are various ways that an LLC can conduct the move.
If you own land or property through a Limited Liability Company, you only have to fill out a simple one-page form in order to transfer the property to an individual, in most instances. If there is any financing in place on the property, you will have to make sure that the mortgage includes a consent to transfer the property form that allows the lender to remove the LLC from the mortgage. This should be included prior to the transfer of the property.
If the move of property ownership from the Limited Liability Company is resulting in a change of form of business, such as corporations or other forms of business. You will need to contact an attorney who is familiar with these forms of business to determine how to proceed with the change in business form.
When you move property ownership from an LLC to an individual, you will usually only have the income tax implications that you would have experienced if you owned the property personally. However, if the LLC is an S corporation, then there are additional capital gains implications that you will need to take into consideration. You will also still have the same property tax assessments, estate taxes and GST liabilities that you would have had regardless of the move. Take all of this into account when performing the transfer.
When you transfer property ownership from a Limited Liability Company to an individual, the income tax implications can be dealt with relatively easily; however, the property tax assessments can be a bit trickier. You will need to complete the required paperwork with the county tax assessor’s office that are required under the local laws. You may need to receive the approval of the county tax assessors before proceeding with the move or face penalties or additional fees.
When transferring property ownership from an LLC to an individual, you are going to want to trust the process to a real estate attorney who is familiar with these types of transfers and the tax consequences that result from them. In addition to this, you can allow Michael Fitzpatrick Architects to help you with custom designs for your new property.