@helpfuluser wrote:
So, yes, in some cases multimember LLCs can be disregarded as entities, which is like being a disregarded entity under the usual rules, and you can preserve 121 eligibility for any subsequent sale (which is important).
Actually in NO case can a multi-member LLC be considered a disregarded entity for the purposes of the Section 121 exclusion. The Regs limit the exception (see below).
Treas. Reg. §1.121-1(c)(3)(ii) provides, in relevant part:
If a residence is owned by an eligible entity....that has a single owner and is disregarded for federal tax purposes as an entity separate from its owner.......the owner will be treated as owning the residence for purposes of satisfying the 2-year ownership requirement of section 121, and the sale or exchange by the entity will be treated as if made by the owner.
