Should I Transfer Ownership Of My Real Estate To My LLC?
Today, many individuals sell and purchase real estate properties with their LLCs or corporations. This can be beneficial for a number of reasons. But what happens if you already own property before setting up your corporation or LLC? In this case, you might be wondering whether you can transfer ownership of your property to your business entity. This may be a challenging prospect, and you might want to get in touch with a qualified attorney with experience in both real estate and business law.
During your initial consultation with an attorney, you can determine the best way forward. Your lawyer can assess your unique situation and let you know how you should proceed. They can then oversee the transfer of the real estate property if necessary, ensuring that all proper and legal steps are closely followed. Working with an attorney makes the most sense if you want to avoid legal and tax issues.
Why Transfer Your Title?
Transferring your title to an LLC or a corporation comes with notable benefits. First of all, it gives you legal protection due to limited liability. This means that if you are sued, your assets are not at risk. If you are paying off your mortgage aggressively, this may also be beneficial. Since you need to keep as much money in your LLC as possible, it doesn’t make sense to set aside money for lump-sum payments outside of the corporation. In order to reduce your tax burden, you can instead treat your real estate as an investment made by your corporation. By doing this, you can make lump-sum payments on your property through the corporation and keep your dividends or salary low to avoid high taxes.
How to Transfer Your Title
Transferring your title is a relatively easy process and can be done in a number of different ways. These methods include:
- Quitclaim Deed
- General Warranty Deed
Consequences of Transferring the Title
You should be aware of the potential consequences of transferring your title before you commit to this course of action. Firstly, you could experience certain tax issues, like transfer taxes and capital gains taxes. You may also lose your homestead exemption. Finally, you should always let your lender know before you transfer ownership of your real estate property. If you fail to do this, you may trigger a “due on sale” clause, which means that you now owe the entire mortgage amount immediately. It’s always a good idea to talk these issues through with your attorney before moving forward.
Enlist the Help of a Qualified Attorney Today
If you’re considering whether or not to transfer ownership of your real estate to your LLC or corporation, get in touch with Alhalel Law as soon as possible. Our Miami real estate & construction litigation lawyers are prepared to assist you throughout each step of the process.