Parents have LLC with residential property.
They want to transfer the property to child's LLC.
Are parents protected by Lifetime Gift tax or would then taxed immediately?
Are both LLCs "Disregarded Entities" (a Single Member LLC that has not made an election to be taxed as a corporation)?
If not, the property is deemed to be distributed to the parents who then give it to the child and then the child contributes to their LLC.
:Parents can use their lifetime estate and gift tax exemption for the gift. either way.
They are just converting to Inc. status.
thank you very much. would it make a difference if they were INC's
Rental, owned outright. No mortgage.
"would it make a difference if they were INC's"
They, which party? Inc, which type?
It's not advisable to hold real estate in an S Corp.
I think what you mean is that it is often not a good idea to hold rental property in an S Corp when there is no other business activity. Certainly, if I own a factory that has $100 million in annual sales, the building itself can be in my S Corp. Or I might want to own it myself and lease it to the company, but then I get sued by the employees and visitors if anyone is injured there.
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