Quit claim property to myself

[savvyscot]

I created a sole member LLC on paper and purchased a property under the LLC's name. I paid for the property with a personal check and never got the LLC an EIN or anything. It just existed by name for a year so now I want to quit claim the property to myself.

I bought for $100,000 and put around $120,000 of improvements. Should the quit claim deed be for $10 since there was never a company and the "company's" basis is my basis as it would have been a pass-through entity anyway?

Or should I quit claim at $220,000 and report something?

[tagteam]

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@savvyscot wrote:

Should the quit claim deed be for $10 since there was never a company and the "company's" basis is my basis as it would have been a pass-through entity anyway?

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Your LLC, being a single-member LLC, is really not much more than your alter ego, and is disregarded for federal income tax purposes. As a result, the transfer will not have an impact in that respect.

However, you should check with your state, county, and local authorities (particularly the county) since some of them are known to be fussy about quitclaim deeds and will charge transfer (stamp) tax for transfers that should be tax-free. As a result, you will want to show nominal consideration.

[Critter]

How did the property get put in the LLC name if you never got an EIN for it ?   What idiot at the closing company made that error ?  In my opinion the LLC was never valid  and it disregarded entity for tax purposes.  I would ask the closing company for a title correction if possible ... or when you sell it get the name corrected at that time.

[tagteam]

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@Critter wrote:

How did the property get put in the LLC name if you never got an EIN for it ?   What idiot at the closing company made that error ?  In my opinion the LLC was never valid  and it disregarded entity for tax purposes. 

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No one at the county level (recorder of deeds, et al) really cares, provided the LLC is registered with the state and all single-member LLCs (that do not elect to be taxed as corporations) are disregarded for federal income tax purposes.