Realestate title change

[shaky4]

What is the name of your state (only U.S. law)? Idaho
Is it possible to sell your home to an LLC company you own, capitalizing on the tax exemption on sale of a home, and at the same time, registering the sale price as the new cost price to the LLC company so that when at some later date when the house is sold the tax paid will be calculated from the then selling price and the updated purchase price?
Please respond Thank You.

 

[tranquility]

Do you wholly own the LLC? What is the business purpose of the sale? Do you plan on living at the house?

Generally, the answer is no. However, the answer could be yes if you are legitimately trying to do business and not just locking in a capital gain issue. Besides, what difference would it make to the eventual outcome? Put out a couple of numbers (make them up) to show assumptions and let's look at them.

 

[shaky4]

yes I and my wife are sole owners of the LLC and we own the property free & clear. my intentions are convert it to a rental. We now have several rental units and would add this to them and buy another residence. The home was purchased at say 70,000.00 and now is say worth 180,000.00. The tax implications are obvious. I would like to take advantage of the home ownership (tax) exemption and convert it to a rental at this time.
Since I have owned it for over 20 years, I feel I should be able to capitalize on the tax exemption now, and by converting it to a rental at this time establish a new cost price for the investment company. If I were to convert it to a rental as is, I would be liable for a substantial tax burden upon selling it. If I were to hold it for 5 or 10 years and then sell it and prices increased say 20% my tax burden would be +\- 25% of the capitol gains of aprox $36,000 where if I were able to re-establish the cost price the tax would be +/- 25% of approximately $146,000 or a difference of several thousand dollars.

 

[divgradcurl]

Talk to a tax professional. Does your LLC pay its own taxes, or does it use the typical pass-through taxation scheme?

 

[tranquility]

See Code section 1239 for one hitch in your get-a-long.