Legal Question in Real Estate Law in Virginia
How to avoid grantor's tax in the followign transfers?
From a wholly owned corp to the same individual who owns the corp?
Wholly owned corp to an LLC (both owned the same indiv.)?
Thanks.
Asked on 9/01/09, 5:20 pm
1 Answer from Attorneys
Michael Hendrickson
Law Office Michael E. Hendrickson
See Va. Code Sec. 58.1-811A.(8) which apparently requires two entities (rather than one entity and one individual) in order for a grantor's tax exemption to apply unless, perhaps, you could claim a reorganization under IRS Section 368(a)(1)(C) or (F).
Consequently, based upon the foregoing, you apparently cannot avoid the grantor's tax in transfer #1 but may be able to in transfer #2 (two entities).
Answered on 9/08/09, 11:26 am
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