I am purchasing my property (4unit building) under my name as an owner occupant. I am going to then place the property under my LLC for asset protection. By doing this will I still be able to quality for the $8,000 tax credit? Or since I have place it under a LLC the taxes will be paid by the LLC and not an individual anymore? :banghead
As long as you do not lie on the mortgage application, you will be OK, but you should check with someone who knows how the law and tax deduction work.
On another point, why do you plan to make an illegal transfer? It won’t be respected by anyone and cost you money and time for nothing.
Provided you meet the first time homeowner qualifications, you have to occupy the property as an OWNER occupant for three years after purchase to qualify for the tax credit.
If you buy, then transfer ownership you are no longer the owner occupant and forfeit your entitlement to the tax credit.
BLL- Just out of curiosity, what makes his transfer illegal?
Assuming asset protection means protection from lawsuits (and that is what investors mean when they say asset protection), then there is a transfer made with intent to hinder, delay, or defraud the collection of a future valid debt. That is a violation of the fraudulent transfer laws.
Just buy it in your own name, get good insurance on it and don’t worry about the LLC. Unless you are a multi-millionaire with a gazillion assets you could lose in a big lawsuit.
Now that’s just my opinion. When you become a multi-millionaire you can afford real legal advice.
So let me see if a have this right, because I am transfering the property over to an LLC for my Real Estate Properties I am braking to law? I thought that was the purpose of a LLC.
The purpose of an LLC is to provide limited liability to investors without the hassles of incorporation. It does not exist to create a situation that allows you to avoid paying your bills. You said the reason for the transfer was asset protection. What did you mean exactly? If you are like most investors, you mean lawsuit protection, which is nothing more than making it harder for a judgment creditor to collect a debt. The intent is illegal not the transfer and you made it easy to prove with your posts in a public web site.
If you start making money, you’ll want to keep most of it yourself and not give
more than you have to in taxes to the U.S. government. What’s the best way for
a start-up company to keep the most money? Probably by forming an LLC, or
Limited Liability Company. For many business owners, the LLC is the best of
both worlds. It gives business owners the protection of forming a corporation
by limiting the liability of the company while giving them the flexibility of
LLCs are a relatively new way to organize a new business, and many states have
included this type of business formation only in the past ten years. But they
are catching on as one of the best ways to form a small company, partly because
of the tax benefits of doing so. An LLC gives owners many of the same benefits
and protections of forming a corporation, but with some added tax benefits.
OK now i understand what your getting at. So maybe I wrote the qeusetion wrong, my qestion is by placing the property under my LLC will i no longer be able to quailify for the tax credit since the LLC will be the owner now. Or it doesnt matter since Im the owner of the LLC
You lose the tax credit it you do not own and occupy the property as your primary residence for three years.
What Dave is saying is that you and your LLC are NOT the same thing, even though you own the LLC. The LLC is it’s own separate legal entity, so if you transfer ownership to the LLC, you don’t own the property anymore, your company (a completely independent entity) does. the tax credit is for owner occupant properties, so if you, rcallstar the person, don’t own your house, you don’t qualify.