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Can LLCs Own Primary Residences?
Q:
Subject: primary residence held in LLC
Question:If I have my primary residence placed in an LLC will there be any capital gains due when I sell it after living there 2 yrs or more??
A:
The tax free exclusion for gains from primary residence sales of up to $250,000 per person is only available for homes owned by individuals.
Properties owned by other entities, such as corporations, partnerships and LLCs, are not eligible for any such tax free sale because only individuals (human beings) can have primary residences under the tax code.
On the books of the other kinds of entities, the property is normally treated as an investment, business or rental property and the only way to defer taxation of any gain is via a 1031 like kind (aka Starker) exchange.
If you are serious about being involved with LLCs and real estate, you really should be working with a tax pro or you could easily find yourself owing a lot of unexpected taxes.
Good luck.
Kerry Kerstetter
Labels: 1031
- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 1/20/2005 05:57:00 PM Send this post:
