Selling property to your own S-Corporation can be beneficial in TWO specific situations. 1.) You do not meet the requirements for excluding capital gains on the sale of your primary home 2.) You can not take advantage of depreciation on appreciated property
Selling to your S-Corp will allow you to take advantage of the 2-Year Exclusion and the new basis. For Example: You lived in a property for 3 years, and rented it out for the next 7 years. Since you haven't lived there for 2 of the last 5 years, you cannot sell the property as a primary residence and avoid the capital gain. However, after moving out of the property, you sold it to your own S-Corporation, which allowed you to exclude capital gain because requirements for the primary residence two-year rule were met. Also: Say you purchased a home for $50k many years ago, and it is worth $500k now. If you decided to just rent it out, the basis for depreciation would be the original basis of $50k. But, after selling it to your S-Corporation and then renting it out, you can depreciate the new basis of $500k. There's no catch and it's A-OK with the IRS. To learn more about how to take control of your real estate investments, check out our resources: TReXGlobal.com <http://www.trexglobal.com> . Community Relations TReXGlobal.com <http://www.trexglobal.com> Simple FREE to Use Web Tools <http://www.trexglobal.com> for Real Estate Investors
