Sugar Land, TX asked in Tax Law for Texas

Q: Are there tax implications when transferring a rent house to an LLC when the LLC has already been operating it?

• My wife and I own a rent house. We also own an LLC.

• We want to transfer ownership of the house to our LLC and want to understand the tax implications.

• The rent house has had an operating loss, and it currently carries a loss carryover to be applied against future profits.

• But the LLC has been operating the rent house all of this time. What I mean is that the revenue has gone to the LLC. The LLC has paid the taxes and insurance and any maintenance. All of the reporting to the IRS has been on Schedule E.

The transfer seemed to be a simple exercise, using a quit deed. But when I saw a reference to loss carry forwards, I began wondering if that's applicable in our situation and, if so, what it would mean.

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1 Lawyer Answer
Kacie Marie Czapla
Kacie Marie Czapla
  • Tax Law Lawyer
  • Tyler, TX
  • Licensed in Texas

A: I am not just passing the buck, but you really need to hire a tax professional with this transaction.

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