Transfer of properties to corporation - Posted by Dave - PA

Posted by Michael A. Bardelli on January 07, 2003 at 21:36:34:

Transfer of the property is easy. Simply deed the property from yourself to the corporation. Here in Virginia, I am even able to use a gift deed to avoid transfer tax. Be aware that when you transfer title to your company you violate the due on sale clause in your loan. Most likely nothing will happen but just something to think about.

Michael A. Bardelli

Transfer of properties to corporation - Posted by Dave - PA

Posted by Dave - PA on January 07, 2003 at 11:57:08:

I currently own a number of rental properties under my own name. I want to set up corporation, not sure if LLC or S corp is best, I believe LLC. Once that is setup is it difficult to get my current properties transferred over into the corporation? Is there much cost to doing that?
Thanks in advance.

Re: Transfer of properties to corporation - Posted by JT-IN

Posted by JT-IN on January 08, 2003 at 07:39:40:


The paperwork to complete the transfer is easy, simply creating Deeds from you to the Corp. As for paying transfer tax, this will vary from state to state.

The real concern is transferring properties with equity to a Corp entity. I am not a tax prfessional, but if the properties being considered for transfer are highly appreciated, (more value today than your current basis) then you run the risk of the amount over basis being declared a dividend to you from the corp, hence a taxable event. You should seek professional tax advice if the property is appreciated over your basis. Absent a local advisor, I would recommend you speak with John Hyre over on the RE Law Board, on this site. John is an Atty and CPA, and all around tax guru and will set you straight on this and other tax matters.

Just the way that I view thingsā€¦