Are you taxed when transferring assets to LLC? Need help soon

USA Discussion in 'General Tax Discussion' started by daysgoby, Sep 14, 2017.

  1. daysgoby

    daysgoby

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    Hi I am brand new to the forum. I appreciate you taking the time to read this.

    I have finished paying off some business equipment. The title can now be transferred to my business, which is myself because I run as a sole proprietor. At this time I would like to form a LLC or LLC taxed as a S corp for this business for liability protection. I am not sure if I should transfer the equipment directly to the new entity once its formed or have the title made to me and then transfer it to the new entity.

    I have talked to an attorney and they said it can be done either way so now I just need to know what taxes impact each scenario. I would like to avoid paying taxes on something I already paid taxes on if it is possible and ethical of course.
     
    daysgoby, Sep 14, 2017
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  2. daysgoby

    Drmdcpa VIP Member

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    Section 351 allows the transfer of business assets to a corporation in a tax free exchange under certain conditions, but the election must be made on the return. You should also be able to put business assets into a partnership without having initial tax consequences. You should consult with a CPA to determine your best course of action.
     
    Drmdcpa, Sep 14, 2017
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    daysgoby likes this.
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