In my limited experience (and limited knowledge) with transfering ownership of a property from one owner to another (i.e., you personally, to an LLC) doing so usually requires the permission of the mortgage holder. If you go and change the ownership or any portion of it without the knowledge and permission of the mortgage holder, that can result in a violation of the mortgage agreement which can make the mortage balance due an payable immediately.
Another thing affected is the property insurance too. For example, when converting a primary residence or other "personal use" property to a rental property, failure to update the insurance can have adverse affects. For example, a normal homeowner's policy does not cover claims that may arise out of business use of the property. You should check with your insurance agent on what (if anything) you may need to do to ensure you have valid coverage. If you don't do this and insurance does not pay out on a claim because the damage occurred while property was being used as a rental, then you've also got problems with the mortgage company, as they "could" considered the property uninsured, which would most likely be in violation of your mortgage agreement.
Now none of what I mentioned has anything to do with taxes, I know. But you "need" to address these things first, before you go making any final decisions. On the tax front through, what you're wanting to do will not fly with the IRS, and would most likely result in an audit anywhere from 24-36 months down the road - possibly sooner. The fines and penalties could make your "savings" a moot point.
