Recently we reached a consensus that there is no tax reporting of any kind when a spouse transfers a piece of land to her husband. However I want to make sure it doesn't matter that the transfer was NOT to the SPOUSE but to his LLC. I am thinking the IRS would disregard it since the LLC is a disregarded entity but I want to be sure I am correct. In case it matters, the LLC is a single member LLC that elects to be taxed as a sole proprietorship.
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Now THAT'S an interesting question.
It would seem to me that since the LLC is a separate legal entity, the tax treatment might be different even though it's a disregarded entity for tax purposes. Especially since the LLC could at any time after the transfer choose to be treated as a corp for tax purposes.
I'm looking forward to the other responses, although I'm leaning toward the idea that it's an untested area of the law since LLC's are still fairly new on the scene. I doubt I'd want to offer a client an opinion on it."The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith -
Purely off the cuff response
Wouldn't it be an inter-spouse transfer with the receiving spouse contributing the property to the LLC owned by the receiving spouse?Comment
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TY Both
Josh I don't think so because the paperwork involved transfers the land from her to the LLC with no mention of him.
I appreciate both responses though.Comment
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