turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

WPKJen
New Member

Do I have to pay Capital Gaines on a house I live in - if it's owned by an LLC I'm a member of?

Some friends had an LLC, and they rented a home to my husband and I. After about four years, we bought out 30% ownership, but continued to pay rent to the LLC. We've now lived here for 7 years and are ready to sell the house. If we do, do we have to pay Capital Gains taxes on it? 

Connect with an expert
x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

2 Replies

Do I have to pay Capital Gaines on a house I live in - if it's owned by an LLC I'm a member of?


@WPKJen wrote:

Some friends had an LLC, and they rented a home to my husband and I. After about four years, we bought out 30% ownership, but continued to pay rent to the LLC. We've now lived here for 7 years and are ready to sell the house. If we do, do we have to pay Capital Gains taxes on it? 


You would not be able to use the Section 121 exclusion because the LLC is not disregarded for federal tax purposes as an entity separate from its owner under Section 301.7701-3 (i.e., you do not meet the ownership test).

 

See Treas. Reg. §1.121-1(c)(3)(ii)

Carl
Level 15

Do I have to pay Capital Gaines on a house I live in - if it's owned by an LLC I'm a member of?

do we have to pay Capital Gains taxes on it?

Bottom line answer to your question is YES, you WILL pay capital gains tax for the reason specified by @tagteam .

 

message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question
Manage cookies