Q: Can a married couple transfer a property to an LLC where only one spouse is a member of the business?
My wife and I want to convert a property to a rental. We intend for an LLC to own the property, and our son will manage it. My son and wife will be members of the LLC but I will not. Is it possible to transfer the title of the property to such an LLC, effectively relinquishing my ownership stake?
A: It is possible but it may not be advisable. I strongly recommend that you have your proposed transfer reviewed by a real estate attorney and your CPA before you take action. Your attorney will be able to let you know if such a transfer might violate the due on sale clause in your financing agreements or cause other potential problems. Your CPA will let you know of any tax issues that may arise as a result of this transfer.
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