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Hello, I am married and planning to purchase my Personal Residence in California under single member LLC. What about the 121 exemption if I purchase it under single member LLC?
John, thank you for your question. If the LLC is disregarded for tax purposes, then the IRS treats it as though you own it personally and you are allowed the 121 exclusion. Here is the rule because most accounts manage to screw this one up: 26 CFR 1.121-1(ii)Certain single owner entities. If a residence is owned by an eligible entity (within the meaning of § 301.7701-3(a) of this chapter) that has a single owner and is disregarded for federal tax purposes as an entity separate from its owner under § 301.7701-3 of this chapter, the owner will be treated as owning the residence for purposes of satisfying the 2-year ownership requirement of section 121, and the sale or exchange by the entity will be treated as if made by the owner.
If I wanted to "house hack" but not have to live on the property for the first year and use a fha loan with 3.5%...could I buy the loan in my name, deed the loan to the llc...and then avoid having to live on the property for the first year? Due to the fact the llc now owns the house and the FHA loan. I might be very wrong but that's why I'm asking lol
How long is the nominee in Wyoming operative? I thought after one year the organizer of the Wyoming LLC shows up on the paperwork. Trying hard to get this right
Great question, in order to assist you further, I highly recommend you request a free 45-minute consultation to discuss our proven asset protection and tax strategies and how they apply to your unique situation. Visit: aba.link/rac
"Your only secured by the amount of money you loan" just after 8:00min Are you saying it's better to have the Line of Credit covering the total value of the house? Why would someone only get a $10,000 line of credit on their house if the house is worth more?
