Transferring investment Propoerty to Single Member LLC

[Aims173]

Hi, I have a similar question with my rental property - I was considering transferring the property from my name to single Member LLC with me as a member.  Is this transfer considered as sale from IRS point of view? Will there be Capital gain on such transfer?

Also is there any rule for how much should be the sale price? as I can literally buy /sale this property to my own SMLLC at a price I wish to reduce my Capital gain?  

[tagteam]

There are no federal income tax consequences as a result of transferring rental property from your name into a single-member LLC.

However, you should be aware of various other considerations before doing so (particularly title insurance and mortgage acceleration clauses).

See https://www.floridabar.org/the-florida-bar-journal/transferring-real-property-into-limited-liability...

[Aims173]

Thank you so much. So the transfer of my rental property to a SMLLC will not be considered as sales for taxes? Any irs material that I can refer to for this? 
Also I have a Primary home that I am converting to rental this year too, Can I transfer that to SMLC at current fair market value to take 250k gain capital gain advantage + claim higher depreciation under llc? 

[tagteam]

There are code sections covering capital contributions for partnerships/multi-member LLCs and S corporations because those are treated as separate entities for federal income tax purposes.

Transfers to single-members LLCs are not since they are treated as entities that are disregarded from their owners. In other words, you are doing nothing more than transferring the property from one pocket to another.

[tagteam]

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@Aims173 wrote:

Also I have a Primary home that I am converting to rental this year too, Can I transfer that to SMLC at current fair market value to take 250k gain capital gain advantage + claim higher depreciation under llc? 

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No. For the purposes of depreciation you will use the lesser of your adjusted basis or the fair market value on the date of conversion.