Hi,
We recently moved out of our primary home and planning to rent it out. Also, will put it up for sale soon after or rent-to-own.
In the meantime, I am planning to move it under an LLC using a quitclaim deed. Same members in LLC as the current title, my wife and I.
Scenario:
Say, our original purchase prices in 2010 was 400K, I do a quit claim to LLC for $1. During next text year, we take depreciation of say, 15K. Later, after a year or so, we sell it for 450K.
So, which one will we (our LLC) be taxed in the following tax year on capital gains tax ?
a) 450K - 400K (original purchase price) + 15K (depreciation) = 65K Capital Gains
b) 450K - 1 (cost to LLC) = 499,999 capital gains
Thank you.
