I transferred a rental property from myself to my own texas LLC. The LLC is designated as a disregarded entity, and to my knowledge does not need a 1065 return. Turbotax (personal return) asks me if I sold/disposed of this rental property. What should I say?Thanks
Your transfer to a single-member LLC (or two member LLC if both members are married and filing a joint return) changes absolutely nothing what-so-ever, since the IRS sees your LLC as a disregarded entity. You still report your rental income & expenses on SCH E. Unless you have non-rental related income/expenses in your LLC, you have nothing to report for your LLC and a SCH C is not required.
Additionally, in some states (Florida being one) it's extremely easy for a claimant to legally circumvent the LLC protection.
For "real" protection, an S-Corp should be formed "after" you have the lender's permission to transfer title to the S-Corp (in writing of course). By going that route, it's also possible to set things up as a IRA too, thus building a retirement nest egg faster than any other investment could ever hope to legally. But if you go the IRA route, consult with an attorney and have them set that up for you. They'll charge a few grand. But in the long run it will be worth it. If you try doing it yourself and make even one teeny tiny mistake, the IRS won't catch it (quite conveniently for them) until you reach retirement age. Then the fines and penalties could easily wipe out any hopes of retirement.