Richmond, VA asked in Tax Law and Real Estate Law for Maryland

Q: If a land parcel is owned by the same parties equally but a portion is held in a llc and other held as individuals.

Can the all the sales proceeds be just allocated to the LlC and just zero proceeds to the Individuals so no 1099 will be issued ?

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1 Lawyer Answer
Mark Oakley
Mark Oakley
  • Rockville, MD
  • Licensed in Maryland

A: The individual owners should have deeded their interest to the LLC before the sale, if they wanted the proceeds all deemed income to the LLC. While the individual owners may be able to direct payment to the LLC, or deposit their checks into the LLC bank account, I believe at this point that will not change any tax implications for the individual owners, and the after-sale transfer of funds will be treated as paid-in capital to the LLC. This is really a tax question that should be addressed to your accountant.

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