Transfering a partnership to a corporation

[jsm104]

I am thinking about starting a LLC or S-Corp for residential real estate investments in the near future. We have recently saw a property that would be a great deal but the corp is not set up yet. If I buy this property personally or in a partnership would it be possible to transfer it to the corporation after it is set up? If so, should a buy it on my own or with my partner? What are the positives and negatives with doing it this way?

 

[loku]

Property investment

If you are sure that you are going to end up in partnership with the other person, one way to do this would be for the two of you to purchase the property as "tenents in common." Then set up the LLC or S-Corp and contribute the property to the organization in exchange for the ownership interests. If you are going to be equal partners, keep everything equal in this from the start. This procedure would probably be the simplest and the most economical.

Otherwise, you could set up a partnership, then contribute capital to it and have the partnership purchase the property. Later incorporate the partnership.