Would you like to move your property into your business but do not know where to start? If so, here are some things you may want to consider.
Business Basics-
What type of business do you have? The type of business you run (sole proprietor, LLC, corporation) makes a difference and determines formalities required. Review all business documents to determine what requirements (if any) are incumbent upon owners of the business to receive property. Some laws may require real estate held in a business' name have certain provisions on the deed. Corporations might have more paperwork and legal hoops to jump through compared to an LLC.
Is your business active? Make sure you have paid your annual registration and that your business is active. An inactive status may impact property rights depending on your state's law.
Tax Considerations-
Money matters: Federal and state taxes might be involved, depending on the property's value and how you got it. Talking to a tax advisor can help you understand any potential tax hits and also help you time your transfer to minimize tax burdens. For instance, a transfer during one year may cause significant tax liability, however a transfer in a subsequent year may be offset by refundable credits and/or deductions.
Value check: The property's value at the time of transfer will help determine how much real estate transfer tax you'll owe if any. You may not need to get the property appraised, but the sage advice or a real estate agent could assist with determining value if not available through other means.
Deeding it Right:
Warranty, Limited Warranty, Quitclaim or Other? As stated in our other posts, a quitclaim deed is simpler, but it doesn't guarantee a clean title and other legal rights which your business may or may not need in the future. Other deed types may offer more protection for your business, but preparing such dees are generally a bit more involved (unless you are using DeedEasy.com, shameless plug). A lawyer can help you choose the right deed for your situation if this is a concern for your transfer.
Third Parties:
Consider Lawyering Up: A real estate attorney can guide you through the legal side of things, making sure everything is done correctly according to Georgia law.
Title Check: A title company can research the property's ownership history and identify any potential problems like liens or encumbrances.
Other Points to Ponder:
Financing in place? If there's a mortgage on the property, you'll need to figure out how it will be handled after the transfer.
Business Impact: Think about how owning the property through your business might affect your operations, insurance, and future financial plans.
The bottom line? If you're thinking about moving your property into a business, then remember that property transfer and acquisition is a significant undertaking; therefore, seeking legal counsel is strongly advised. A qualified attorney can assist in selecting the appropriate deed type and ensure a well-executed transaction.
If you have questions or need assistance, sign up for our affordable and efficient deed preparation services and speak with a lawyer about your matter today.
The information provided in this blog is given for educational purposes only and should not be taken as legal advice for your specific matter. Applying the knowledge received here to your legal situation is at your own risk.
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