Capital Gain Taxes - Buying with an LLC

wouldn't you try to use the 1031 exemption?

If you treat the LLC like a partnership and own 100% the losses and gains will be passed through to you.

Can anyone explain why someone would use an LLC to buy their primary residence in New York? Thanks.

It's useful for very-expensive condos (co-ops don't allow it) that would be reported upon in the press and be noted by stalker fans and irate stockholders. If you're careful about not signing the deed and power of attorney, it's harder to trace it back to you.

Slightly off-topic: privacy aside, is there any advantage at all to owning investment real estate in an LLC? Do any legal/tax benefits hold up that wouldn't be allowed for an individual owning in his own name?

its all about the LL in LLC.

http://www.bankrate.com/brm/news/real-estate/20060128a1.asp

No tax benefits, as malthus said.

I guess it'd help if the LLC, as owner, got slapped with a big liability judgement or something, so the plaintiff couldn't go after other assets. Unless a court pierced the corporate veil.

Thanks, gcondo & NWT. I think the corporate veil thing is what I once heard about. For a one-person LLC, I wonder if courts are likely to do that as a matter of course, rarely, or somewhere in between?

I'd say "rarely," just going by the few decisions I've noticed. But then I skip by most of the stuff that isn't RE-, probate-, or scandal-related.

Re piercing the veil, it depends on how well you set it up and follow the rules you and the state establish, but in any event it is an extra step that any potential adversary would have to deal with in going after you.

The real advantage is insulation from liability but the other advantage to buying through an LLC is that you could potentially transfer the asset more quickly by selling the LLC rather than the property, which requires additional regulatory filings. I.e., you sell the llc to your wife to protect it from creditors of other assets.

The downside is cost, especially in NY where you have to file some notice that the company has been formed in newspapers.

And how about when you, sole owner of the LLC, die, and assets are to be split evenly among named heirs? PITA for executor? Much cost to estate?

Out of my wheelhouse but you own units/interests in an llc which should be treated similarly to shares in a c-corp.