Question On Capital Gains Rates After Transfer To Trust/LLC
Later this year I am planning to sell a rental property that I have owned personally for more than a year. However, I am currently planning to transfer ownership of the property to a land trust which will have my LLC (pass through entity) as the beneficiary. When I go to sell the property will I be expected to pay the short-term capital gains rate? Or since my LLC is a pass through entity will I just pay the LT capital gains as if I had never deeded the property to the land trust?
If you are going to sell the property this year, why bother with the interim transfer to a trust? Why bring in the possibility of short term capital gains and extra transfer/recording fees when you are planning to sell the property anyway.
I personally don't see any benefit to putting your property into a trust for such a short term.
More as a protection in a potentially near-term lawsuit. I have 8 tenants and at least one of them appears to be sue-happy. While I agree it may be a lot of trouble for a short term benefit, I'd rather be safe than sorry.
Consult your attorney also. I am told that when you transfer assets in anticipation of a lawsuit, the courts will just "pierce the veil" anyway.