Rental Beach House And A New LLC
I live in Virginia and own a beach house in NC and I recently set up an LLC for protection and alleged tax benefits but first I need to get the beach house transferred over to the LLC.
I have heard a "quit deed" will work but is there a specific kind and will I get hit with any type of taxes.
Thanks for any insight.
Big7Toe
I am also in the process of setting up my LLC to hold my rental property. I have read a lot of opinions about how the passive income affects your taxes but this is my understanding so far (I am no tax expert so you might want to get some more advice).
As long as you are holding only one property in your LLC and the difference in your payments (PITI) and rent is not too much, then I don't think you will be adversely affected by any taxes. The LLC is a pass-through tax entity and at the end of the year, you report your net income as your own income and add it to your income on your 1040. In my case, I will end up with about an extra $700 at the end of the year and this isn't enough to push me into the next tax bracket.
Hope this helped.
JS
You will probably want to execute a Quitclaim Deed from you personally to your LLC. Check with a VA attorney. A Quitclaim Deed transfers whatever title you have at the time of the transfer with no warranties. Think of it as an "as is" deed. A Grant Deed transfers the title you claim you have with warranties that you actually have it. There are nuances to theses deeds beyond what I can describe here, but that is the essence of the deeds. I am an attorney in California, and this is not legal advice. See an attorney in VA for specifics to your situation.