Legal Question in Real Estate Law in California

Real estate

I am trying to get some real estate legal advice so that I know how to proceed in my situation. My father and I opened an LLC together and in it we have invested in an apartment building and are in the process of building hotel together. We are 50/50 owners of the LLC. I want to buy his share of the apartment building, outside of the LLC. How would that work considering that I already own 50% of it? Do I have to buy the building from the LLC or can we just transfer the ownership into my name? What would the tax implications be? Also, would it be better to buy it as part of another LLC or to own it personally?

thank you for your help

Larry


Asked on 4/06/07, 5:28 pm

3 Answers from Attorneys

Re: Real estate

You questions are way beyond what is appropriate for this forum. You need to contact an attorney and tax advisor and present the entire situation, including all LLC documents for review.

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Answered on 4/06/07, 7:11 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: Real estate

As the Indiana attorney has implied, a deal involving as much money as this must warrant the two of you, or the LLC itself, to retain counsel. You probably also need the advice of an accountant who can review your books, your personal tax situations, and then advise on the tax consequences of any transaction.

One item of advice I can offer is to be careful always to recognize the separate nature of the LLC. If it sells you 1/2 of the apartment building, you will then own 1/2 and the LLC will still own 1/2, and only in long-term effect will you have 3/4 and your father 1/4. In order for you to own 100% of the apartment, either the LLC must sell it to you, or you need to buy your father's share of the LLC and thus beneficially acquire the apartment building. If this LLC has aready been "polluted" by having an interest in the hotel project, this aspect would have to be dealt with first. A CPA with a strong tax practice would be able to provide valuable assistance in structuring your enterprises so the tax collector does you the least long-term harm.

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Answered on 4/06/07, 10:15 pm
Mark Voigtmann Baker & Daniels

Re: Real estate

I agree with both of the previous replies. You need an attorney to review the potential transaction in great detail. I would strongly recommend against proceeding in any fashion without an investment in experienced legal advice.

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Answered on 4/08/07, 11:34 am


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