[WSBARP] assignment

[Kary Krismer]

That very well might be correct--my prior post was what the OP "might" 
be missing, but I don't think that came through well. Those would be 
issues that would concern me.  Tax is an area that has always interested 
me, but not something I practice in.

I would note that the item you posted though only seems to apply to 
business entities, which this seemingly is not, and only in community 
property states, which makes me wonder if it's something meant to be 
applicable to estate taxes.

But as to your line of thinking, there is also subpart (c)(3) of this 
which seems to apply more directly to the gain issue (but not the 
interest issue), but which refers to the entity having a single owner 
for some reason (and also covers trust entities).

https://www.law.cornell.edu/cfr/text/26/1.121-1

Kary L. Krismer
John L. Scott/KMS Renton
206 723-2148

On 11/22/2017 9:44 AM, Cody Moore wrote:
>
> I’m going to tiptoe in to offer an opinion as much as ask some 
> questions. It’s my understanding that a H/W LLC can be treated as a 
> disregarded entity and thus they still get the benefit of the home 
> sale exclusion under IRC 121. I’m basing my understanding on the 
> attached Rev. Proc. I had saved away along with some old notes (not 
> attached).
>
> Thanks,
>
> *Cody R. Moore *
>
> Westberg Roepke Moore, PLLC
>
> (208) 883-1520
>
> _______________________________________________________________________________
>
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> *From:*wsbarp-bounces at lists.wsbarppt.com 
> [mailto:wsbarp-bounces at lists.wsbarppt.com] *On Behalf Of *Kary Krismer
> *Sent:* Wednesday, November 22, 2017 8:44 AM
> *To:* wsbarp at lists.wsbarppt.com
> *Subject:* Re: [WSBARP] assignment
>
> I would be surprised if the escrow would go along with that since you 
> would be violating the terms of the P&S agreement.
>
> I have no idea what the tax advisor is thinking, but is it possible 
> that you could just transfer it after the deed is recorded and get the 
> same benefits?   I'm fairly certain you could still avoid REET.
>
> As to what you might be missing:  1.  No homestead protection;  2.  No 
> sale of property excluding 250k/500k of gain on income taxes; and 3.  
> No deduction of interest or real estate taxes.  Again I have no idea 
> what the tax advisor is thinking, but the first two of those are two 
> things I wouldn't want to give up--the third might not matter if it's 
> a cash purchase.
>
> Kary L. Krismer
> John L. Scott/KMS Renton
> 206 723-2148
>
> On 11/21/2017 4:49 PM, Scott Thomas wrote:
>
>     Clients entered into P&S agreement, entailing construction of new
>     home.  NWMLS form used, which precludes assignment unless seller
>     agrees.  Construction of home turned out to be a difficult
>     process, with numerous issues turning up.  Long story short, I
>     will make certain neither party sees the other at the escrow
>     office when the sale closes.  Now for my question: clients, who
>     entered the P&S agreement as a marital community, have been
>     advised by their tax lawyer that it would be preferable to form an
>     LLC to take title to the property.  I am thinking the easiest way
>     to accomplish this is to simply have clients assign their interest
>     in the property at the time of closing, after seller has executed
>     closing documents and the P&S agreement is satisfied, but before
>     the deed is recorded.  Transfer taxes should not be an issue, and
>     all obligations under the P&S agreement would be completed. Am I
>     missing anything?
>
>
>
>
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