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Vince23
342 Posts |
 Posted - 04/14/2008 : 07:01:09 AM
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3unit, NOO
300k Loan Amt
730 Fico
Full Doc
San Diego, CA
60% LTV (borrower is putting 200k down!)
The only difficult part of this file is that the borrower wants to have the vesting under his LLC. He needs it that way to qualify for his 1031 exchange.
Please let me know if anyone can do this.
Unfortunately, I can't quitclaim it after the purchase. It has to be bought initially w/ the vesting under the LLC. (I know it sounds way too restrictive, but that's what my client's attorney said).
Thanks,
-V |
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brandie
3260 Posts |
Posted - 04/14/2008 : 07:17:49 AM
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Could you do the loan and title in his own name, then quick deed it to the LLC after it closes.
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terry_g
396 Posts |
Posted - 04/14/2008 : 07:32:53 AM
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I'm not an accountant, but...
This is not like simply deeding from an individual in/out of a trust. There are tax implications. The moment the deed transfers from the LLC to his name as an individual at the closing of the purchase, it disqualifies it for an IRC Section 1031 exchange, triggering tax. It becomes an un-like kind exchange. Also being in CA, it will trigger 2 (in and out) county transfer taxes at $1.10/k and/or a city transfer tax (if applicable). Not cheap.
There could be other alternatives, but I highly doubt that a deeding from LLC to individual and back to LLC is one of them. Have the client seek a competent accountant who specializes in real estate/1031's, and not just a basic tax preparer, realtor or loan person.
Have you calculated the difference in tax basis / gain to know whether the tax would be substantial or not if a "sale" took place?
quote:
Originally posted by brandie
Could you do the loan and title in his own name, then quick deed it to the LLC after it closes.
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