Q: Hello, I have a question regarding a property currently owned in an LLC (see below). Thanks for your answer. Peter
My wife and I own a condo in Los Angeles for about 10 years. It is titled to an LLC ( LLC under both our names) for about 5 years, when we put it out for rent under the LLC business.
Since 1 year, we moved back and live in it. The LLC has no other business at the moment.
Thinking about selling in a couple of years, and looking at capital gain taxes, we are thinking to change back the ownership to both our names.
1)Will the assessor reassess the property?
2)Is that the right thing to do to benefit the capital gain taxes exemption?
3)Any other issues to consider?
A:
In general a transfer of property between an entity (such as an LLC), to one or more individuals will trigger a change in ownership and a reassessment of property tax. An exclusion provides that transfers between individuals and entities in which the proportional ownership is unchanged are not subject to a change in ownership.
See, RTC 62(a) and below at Property Tax Rules 462.180
RE: PROPORTIONAL TRANSFERS OF REAL PROPERTY.
Transfers of real property between separate legal entities or by an individual to a legal entity (or vice versa), which result solely in a change in the method of holding title and in which the proportional ownership interests in each and every piece of real property transferred remain the same after the transfer.
See, https://www.boe.ca.gov/proptaxes/pdf/ptr462-180.pdf
Jonathan Purcell is a California Attorney. This posting does not create any attorney-client relationship. The information presented here is general in nature and is not intended nor should be construed as legal advice for any particular case or client. For specific advice about your particular situation, please consult with your own attorney. This posting is not intended to constitute an advertisement or a solicitation
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