ahearn Posted July 10, 2008 Report Posted July 10, 2008 Have a client that has an LLC with one rental property. They are considering buying another house and want to sell their current house, which is their principal residence, to the LLC. I'm not sure if the sale to the LLC, which only consists of the husband and wife, would qualify for the home-sale exclusion. Does anyone have any thoughts on this matter? Quote
jainen Posted July 11, 2008 Report Posted July 11, 2008 >>sale to the LLC<< It would be hard to structure this in any way that was not a sham transaction, especially if the "sellers" carried or guaranteed a mortgage for the "buyer." Anyway, since the partnership would hold the property as a rental the partners would recognize ordinary income, not "gain," so there would be nothing to exclude. Quote
RoyDaleOne Posted July 11, 2008 Report Posted July 11, 2008 The exclusion is not available to partnerships, LLC, only individuals and maybe to bankrupt estate or grantor trust. Sale and or exchange to related parties as defined under IRC 267( B ) or IRC 707( B ) are not eligible for the exclusion. Quote
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.