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Disadvantages of LLCs for Rental Property 1 Disadvantages of LLCs for Rental Property. 2 Tax Complexity. 3 Setup Challenges. 4 Transferred Tax Obligations. 5 Asset Protection Not Guaranteed. 6 Financing Challenges. 7 Increasing Expenses. 8 Considerations and Conclusion.
You can transfer your stock to an LLC that you own, but will not avoid any capital gain tax. If/When you eventually sell the stock out of the LLC, the capital gain will pass through to you personally as taxable capital gains.
The main difference between an LLC and an S-corp is that an LLC is a type of business entity and an S-corp is a type of tax structure created by the IRS.
When a member of an LLC which qualifies as a disregarded entity dies, the assets held within the LLC will typically receive a step-up in basis, since the LLC is treated as an extension of the individual for tax purposes.
The management flexibility, tax benefits and protection of personal assets offered by LLCs make it a great vehicle for investment opportunities. Since there can be more than one member, it's often the business entity of choice when multiple people are looking to invest in something as a group.