How to Place Property in an LLC

By Joseph Nicholson

An LLC is a distinct legal entity from its owners, which is what affords protection from personal liability from the business's debts. But this also means that for the LLC to legally own property, it must be titled in the name of the company. Placing property in an LLC is a process of ensuring the LLC is the recognized owner of the asset, but the manner in which this is done can have tax consequences for both you personally and the business.

An LLC is a distinct legal entity from its owners, which is what affords protection from personal liability from the business's debts. But this also means that for the LLC to legally own property, it must be titled in the name of the company. Placing property in an LLC is a process of ensuring the LLC is the recognized owner of the asset, but the manner in which this is done can have tax consequences for both you personally and the business.

Step 1

Sell or donate tangible assets to the company. Draw up a bill of sale to confirm the sale. This works well for movable and household goods like computers or desks. As long as the LLC doesn't resell the goods, you don't have to worry about creating an abusive tax shelter by setting the sale price extraordinarily low. If the assets are donated for free, this is a capital contribution that still needs to be reflected in the company's ledger, with the carryover basis for depreciation purposes remaining that of the previous owner.

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Step 2

Record a deed to transfer real property. To place real property in the ownership of an LLC, the deed to the property should reflect the company as the title holder. This means drawing up a title deed and recording it at the county recorder's office. Note that if the property is subject to a mortgage, the transfer could trigger an acceleration clause in the mortgage, or may be prohibited outright.

Step 3

Transfer paper assets to the company's account. Cash, stocks, bonds and other paper assets can be transferred from one account to another. Open the appropriate type of bank or investment account in the name of the company and then request to transfer the property from your personal account to the business account. As with tangible, movable goods, these assets can be sold or contributed to the LLC.

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