Posted by Skip on November 29, 2004 at 24:14:19:
I bought two rental properties this year. The titles are in my name. I planned to quit-claim them to an LLC I set up (a single-member LLC), but I wasn’t in any hurry since I understood I could take the tax losses whether the titles were in my name or the LLC’s name. However, I just thought of a possible problem: The LLC has paid all expenses for these properties from its own account – downpayments, closing costs, mortgages, and all other business expenses. And the tenants’ rent checks are made out to the LLC.
So my question is is it a problem for the LLC to pay expenses for and receive income from properties it doesn’t own? I’m thinking the best course of action is to quit-claim the properties into the LLC before the end of the year. That way the LLC would own the properties it’s been dealing with. Does that sound right?