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Discussion Forum Index --> Tax Questions --> Single mbr LLC-Wood shop on resid prop
Eddycpa (talk|edits) said:
| 15 August 2006
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| A new client recently formed a LLC for his cabinetry business. Previously he was a sole proprietor. He built a 1600sf shop on his property about 18-24 months ago. He also has significant tools he uses, not sure he has ever claim any depreciation on any of this. What is the best way to handle these assets? Should/can they be transferred to the LLC? Also, what retirement options would be suitable?
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Beengel (talk|edits) said:
| August 15, 2006
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| is the LLC also as a sole proprietor?
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JCTMSTx (talk|edits) said:
| 15 August 2006
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| If a Corporation: Section 351 applies. Property trfd to Corp for Stock. Must be in control after trf (Min.80%). No gain or loss on trf of assets since no change in the txpyr economic status Sect.362(a)get carryover basis for the assets. Look at solo 401 (k) for retirment.
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WesR (talk|edits) said:
| 15 August 2006
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| Hi sounds like you need to chat further with your client. If he was a sole proprietor his equipment should have been written off and if not he technically is out of luck (allowed or allowabe). If the LLC is sinlge member I assume you will continue with the sch C. I would depr the shop cost over 39 comm bdlg years. Titling the shop in the LLC is a legal question that may not be doable. If the equipment has been written off and you bring them on the books at estimated cost equal to A/D for future sale purposes fine. Otherwise you can record any sale later as all ordinary due to recapture if and when he sells anything. OK? bye
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Eddycpa (talk|edits) said:
| 15 August 2006
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| Wow, that was fast! Thanks for your helpful comments. I will gather more information regarding the LLC's structure as corporation or sole-propr. as well as how tools were treated. If my discussion raises additional questions I'll be back. :) Thanks, again.
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