<html xmlns:v="urn:schemas-microsoft-com:vml" xmlns:o="urn:schemas-microsoft-com:office:office" xmlns:w="urn:schemas-microsoft-com:office:word" xmlns:m="http://schemas.microsoft.com/office/2004/12/omml" xmlns="http://www.w3.org/TR/REC-html40"><head><meta http-equiv=Content-Type content="text/html; charset=us-ascii"><meta name=Generator content="Microsoft Word 15 (filtered medium)"><style><!--
/* Font Definitions */
@font-face
{font-family:"Cambria Math";
panose-1:2 4 5 3 5 4 6 3 2 4;}
@font-face
{font-family:Calibri;
panose-1:2 15 5 2 2 2 4 3 2 4;}
@font-face
{font-family:Consolas;
panose-1:2 11 6 9 2 2 4 3 2 4;}
/* Style Definitions */
p.MsoNormal, li.MsoNormal, div.MsoNormal
{margin:0in;
margin-bottom:.0001pt;
font-size:11.0pt;
font-family:"Calibri",sans-serif;
color:black;}
a:link, span.MsoHyperlink
{mso-style-priority:99;
color:#0563C1;
text-decoration:underline;}
a:visited, span.MsoHyperlinkFollowed
{mso-style-priority:99;
color:#954F72;
text-decoration:underline;}
pre
{mso-style-priority:99;
mso-style-link:"HTML Preformatted Char";
margin:0in;
margin-bottom:.0001pt;
font-size:10.0pt;
font-family:"Courier New";
color:black;}
p.msonormal0, li.msonormal0, div.msonormal0
{mso-style-name:msonormal;
mso-margin-top-alt:auto;
margin-right:0in;
mso-margin-bottom-alt:auto;
margin-left:0in;
font-size:11.0pt;
font-family:"Calibri",sans-serif;
color:black;}
span.HTMLPreformattedChar
{mso-style-name:"HTML Preformatted Char";
mso-style-priority:99;
mso-style-link:"HTML Preformatted";
font-family:Consolas;
color:black;}
span.EmailStyle21
{mso-style-type:personal;
font-family:"Calibri",sans-serif;
color:windowtext;}
span.EmailStyle22
{mso-style-type:personal;
font-family:"Calibri",sans-serif;
color:windowtext;}
span.EmailStyle23
{mso-style-type:personal-reply;
font-family:"Calibri",sans-serif;
color:windowtext;}
.MsoChpDefault
{mso-style-type:export-only;
font-size:10.0pt;}
@page WordSection1
{size:8.5in 11.0in;
margin:1.0in 1.0in 1.0in 1.0in;}
div.WordSection1
{page:WordSection1;}
--></style><!--[if gte mso 9]><xml>
<o:shapedefaults v:ext="edit" spidmax="1026" />
</xml><![endif]--><!--[if gte mso 9]><xml>
<o:shapelayout v:ext="edit">
<o:idmap v:ext="edit" data="1" />
</o:shapelayout></xml><![endif]--></head><body bgcolor=white lang=EN-US link="#0563C1" vlink="#954F72"><div class=WordSection1><p class=MsoNormal><span style='color:windowtext'>Yes, it is correct – see 26 CFR section 1.121(c)(3)(ii), which specifically provides that a single owner disregarded entity is treated as the owner for purposes of the section 121 exclusion. Rev. Proc. 2002-69 does talk in terms of business entities, but I don’t know why else the Service would have seen fit to include paragraph (c)(3)(ii), given that section 121 does not apply to business entities.<o:p></o:p></span></p><p class=MsoNormal><span style='color:windowtext'><o:p> </o:p></span></p><p class=MsoNormal><span style='color:windowtext'>Beyond this, I would agree that it is hard to understand why the property, if it is these folks’ principal residence, should be owned by an LLC. There may be other issues involved, but this would be contrary to the prevailing view of LLC experts.<o:p></o:p></span></p><p class=MsoNormal><span style='color:windowtext'><o:p> </o:p></span></p><p class=MsoNormal><span style='color:windowtext'>Bob Pampell<o:p></o:p></span></p><p class=MsoNormal><span style='color:windowtext'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:#1F497D'>Robert Pampell, Attorney<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:#1F497D'>21st Century Law Office (r)<o:p></o:p></span></p><p class=MsoNormal style='text-autospace:none'><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:#365F91'>19125 Northcreek Parkway, Suite 120<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:#365F91'>Bothell, WA 98011<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:#1F497D'>voice: 425-329-2629<br>email: </span><span style='color:#1F497D'><a href="mailto:rpampell@swcp.com" title="mailto:rpampell@swcp.com"><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'>rpampell@swcp.com</span></a></span><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:#1F497D'><o:p></o:p></span></p><p class=MsoNormal><span style='color:#1F497D'><a href="http://www.linkedin.com/in/robertpampell"><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:blue'>http://www.linkedin.com/in/robertpampell</span></a></span><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:#1F497D'><o:p></o:p></span></p><p class=MsoNormal><span style='color:windowtext'><o:p> </o:p></span></p><p class=MsoNormal><span style='color:windowtext'><o:p> </o:p></span></p><div><div style='border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in'><p class=MsoNormal><b><span style='color:windowtext'>From:</span></b><span style='color:windowtext'> wsbarp-bounces@lists.wsbarppt.com [mailto:wsbarp-bounces@lists.wsbarppt.com] <b>On Behalf Of </b>Kary Krismer<br><b>Sent:</b> Wednesday, November 22, 2017 10:25 AM<br><b>To:</b> wsbarp@lists.wsbarppt.com<br><b>Subject:</b> Re: [WSBARP] assignment<o:p></o:p></span></p></div></div><p class=MsoNormal><o:p> </o:p></p><p>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. <o:p></o:p></p><p>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.<o:p></o:p></p><p>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).<o:p></o:p></p><p><a href="https://www.law.cornell.edu/cfr/text/26/1.121-1">https://www.law.cornell.edu/cfr/text/26/1.121-1</a><o:p></o:p></p><pre>Kary L. Krismer<o:p></o:p></pre><pre>John L. Scott/KMS Renton <o:p></o:p></pre><pre>206 723-2148<o:p></o:p></pre><div><p class=MsoNormal>On 11/22/2017 9:44 AM, Cody Moore wrote:<o:p></o:p></p></div><blockquote style='margin-top:5.0pt;margin-bottom:5.0pt'><p class=MsoNormal><span style='color:windowtext'> </span><o:p></o:p></p><p class=MsoNormal><span style='color:windowtext'>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).</span><o:p></o:p></p><p class=MsoNormal><span style='color:windowtext'> </span><o:p></o:p></p><p class=MsoNormal><span style='color:windowtext'>Thanks, </span><o:p></o:p></p><div><p class=MsoNormal><b>Cody R. Moore </b><o:p></o:p></p><p class=MsoNormal>Westberg Roepke Moore, PLLC<o:p></o:p></p><p class=MsoNormal>(208) 883-1520<o:p></o:p></p><p class=MsoNormal><span style='color:#1F497D'>_______________________________________________________________________________</span><o:p></o:p></p><p class=MsoNormal><span style='color:#1F497D'>This transmission, or any attachment thereto, from Westberg Roepke Moore, PLLC is intended only for those persons and/or entities to whom it is addressed. The information transmitted may be confidential and/or protected by a privilege or as attorney work product. If this transmission is not intended for you, please return it and then destroy it completely. Any unauthorized use of this transmission is strictly prohibited.</span><o:p></o:p></p><p class=MsoNormal><span style='color:windowtext'> </span><o:p></o:p></p></div><p class=MsoNormal><span style='color:windowtext'> </span><o:p></o:p></p><div><div style='border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in'><p class=MsoNormal><b><span style='color:windowtext'>From:</span></b><span style='color:windowtext'> <a href="mailto:wsbarp-bounces@lists.wsbarppt.com">wsbarp-bounces@lists.wsbarppt.com</a> [<a href="mailto:wsbarp-bounces@lists.wsbarppt.com">mailto:wsbarp-bounces@lists.wsbarppt.com</a>] <b>On Behalf Of </b>Kary Krismer<br><b>Sent:</b> Wednesday, November 22, 2017 8:44 AM<br><b>To:</b> <a href="mailto:wsbarp@lists.wsbarppt.com">wsbarp@lists.wsbarppt.com</a><br><b>Subject:</b> Re: [WSBARP] assignment</span><o:p></o:p></p></div></div><p class=MsoNormal> <o:p></o:p></p><p>I would be surprised if the escrow would go along with that since you would be violating the terms of the P&S agreement.<o:p></o:p></p><p>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. <o:p></o:p></p><p>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.<o:p></o:p></p><pre>Kary L. Krismer<o:p></o:p></pre><pre>John L. Scott/KMS Renton<o:p></o:p></pre><pre>206 723-2148<o:p></o:p></pre><div><p class=MsoNormal>On 11/21/2017 4:49 PM, Scott Thomas wrote:<o:p></o:p></p></div><blockquote style='margin-top:5.0pt;margin-bottom:5.0pt'><p class=MsoNormal>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?<o:p></o:p></p><p class=MsoNormal><br><br><br><br><o:p></o:p></p><pre>_______________________________________________<o:p></o:p></pre><pre>WSBARP mailing list<o:p></o:p></pre><pre><a href="mailto:WSBARP@lists.wsbarppt.com">WSBARP@lists.wsbarppt.com</a><o:p></o:p></pre><pre><a href="http://mailman.fsr.com/mailman/listinfo/wsbarp">http://mailman.fsr.com/mailman/listinfo/wsbarp</a><o:p></o:p></pre></blockquote><p class=MsoNormal> <o:p></o:p></p><p class=MsoNormal><br><br><br><o:p></o:p></p><pre>_______________________________________________<o:p></o:p></pre><pre>WSBARP mailing list<o:p></o:p></pre><pre><a href="mailto:WSBARP@lists.wsbarppt.com">WSBARP@lists.wsbarppt.com</a><o:p></o:p></pre><pre><a href="http://mailman.fsr.com/mailman/listinfo/wsbarp">http://mailman.fsr.com/mailman/listinfo/wsbarp</a><o:p></o:p></pre></blockquote><p class=MsoNormal><o:p> </o:p></p></div></body></html>