Land Trust Transfer - Who Pays Taxes On Sale?
If I purchase a property in my name, and also have the mortgage in my name. Then I place the property into a Land Trust and have my LLC as the benficial interest. When the property is sold, is this a taxable event for me, my LLC or both?
Brenda
I'm just going to speculate a little bit on this so don't take my word for it.
But first, I believe that in order to make sure that you first don't get charged a conveyance fee from transferring the property from your name to the land trust you'll have to make sure you can qualify for one of the exemption that your state auditor provides for. Here in Ohio, we use the DTE100EX form I think it is. This is the form that you fill out in order to be exempt from conveyance taxes. They should have an item on the exemption list that refers to transferring title into a trust.
When you sell the property (or technically when your trustee transfers title) you'll be subject to conveyance fees. However, you might consider simply selling/transferrign the beneficial interest to the buyer and leaving the property in the trust. The beneficial interest is considered personal property and not real property.
Though....might this transfer be subject to "personal property" tax instead?
Who has experience in this area? I've never sold a property out of a trust so I'm not certain.