Easton, MD asked in Real Estate Law and Tax Law for Maryland

Q: Hi, Md. gen. family partnership wants to trans. land into an LLC, said LLC to be owned by two corps.

Two corps. owned by same family members in same percentages.

LLC would be owned by corps., not the exact same people, but those same people own same respective percentage of shares.

Does partnership have to consolidate or dissolve?

What exceptions to transfer and recordation taxes, if any?

What deed recitals?

What other forms to transfer without taxes?

Can you recommend title company?

Related Topics:
1 Lawyer Answer
Cedulie Renee Laumann
Cedulie Renee Laumann
  • Crownsville, MD
  • Licensed in Maryland

A: Most real estate lawyers should be able to assist with such a transfer and the applicable deed affidavits and forms.

The transfer you describe (from a general partnership to 2 corporations owned by different owners than the general partnership) sounds like it would be subject to transfer/recordation taxes.

The default rule in Maryland is that ALL deeds are subject to transfer and recordation taxes. Just because the same family members will be in some fashion involved with the various entities does not automatically make a transfer between the entities exempt. A transfer may be exempt if it fits one of the specific exemptions set forth in the Tax-Property article. Sometimes a transfer from a partnership to an LLC is exempt. Per statute, exemption applies if "the members of the limited liability company are identical to the partners of the converting general partnership" (See Tax-Property 12-108). Your description does not seem to fit although you could always contact the relevant transfer tax office if you have further questions about the applicability or calculation of transfer taxes.

Our law firm assists with LLC deeds, including those related to a discontinuation of a real estate enterprises, as I'm sure do others. You may wish to reach out to a real estate attorney or title company of your choosing.

Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.

The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.

Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.