What steps are required to transfer real estate into a LLC?
"especially considering it has a mortgage on it (technically a home   equity loan on my primary residence). I'm not following. Does it have a mortgage on it, or your primary residence (a different property) was used as a security for the loan? If it is HELOC from a different property - then it is really your business what to do with it. You can spend it all on casinos in Vegas for all that the bank cares. Is this a complicated transaction? Any gotchas I should be aware of   before embarking on it? Obviously you should talk to an attorney and a tax adviser. But here's my two cents: Don't fall for the ""incorporate in Nevada/Delaware/Wyoming/Some other lie"" trap. You must register in the State where you live, and in the State where the property is. Incorporating in any other State will just add complexity and costs, and will not save you anything whatsoever. 2.1 State Taxes - some States tax LLCs. For example, in California you'll pay at least $800 a year just for the right of doing business. If you live in California or the property is in California - you will pay this if you decide to set up an LLC. 2.2 Income taxes - make sure to not elect to tax your LLC as a corporation. The default for LLC is ""disregarded"" status and it will be taxed for income tax purposes as your person. I.e.: IRS doesn't care and doesn't know about it (and most States, as well). If you actively select to tax it as a corporation (there's such an option) - it will cost you very dearly. So don't, and if someone suggest such a thing to you - run away from that person as fast as you can. Mortgages - it is very hard to get a mortgage when the property is under the LLC. If you already have a mortgage on that property (the property is the one securing the loan) - it may get called once you transfer it into LLC, since from bank's perspective that would be transferring ownership. Local taxes - transferring into LLC may trigger a new tax assessment. If you just bought the property - that will probably not matter much. If it appreciated - you may get hit with higher property taxes. There are also many little things - once you're a LLC and not individual you'll have to open a business bank account, will probably need a new insurance policy, etc etc. These don't add much to costs and are more of an occasional nuisance."
An LLC does not pay taxes on profits. As regards tax a LLC is treated as a Partnership, but instead of partners they are called members. The LLC is a passthrough entity. As in Partnerships members can have a different percentage ownership to the share of profits. The LLC reports the share of the profits of the members. Then the members pay the tax as an individual. The profit of the LLC is deemed to have been transferred to the members regardless of any funds transferred. This is often the case as the LLC may need to retain the profits for use in the business. Late paying customers may mean there is less cash in the LLC than is available to distribute.  The first answer is wrong, only a C corporation files a tax return. All other corporate structures are passthrough entities. The C corporation pays corporation tax and is not required to pass any funds to the shareholders. If the C corporation passes funds to the shareholders this is a dividend, and taxable to the shareholder, hence double taxation. As I understand it, capital gains from real estate sales in India can be shielded from income tax entirely if the proceeds of the sale are invested in certain specific types of bonds (Rural Highway Contruction Authority of India?) for a period of three years beginning no later than x months (6 months?) after completion of the sale. Perhaps this applies to sales of inherited real estate only and not to commercial property or residential property acquired by purchase since there is no step-up of basis on death as occurs in the US, and in all likelihood, records of the purchase price of the inherited property are lost in the mists of time, and so the basis of the investment is effectively zero (or treated as such by the revenue authorities) The interest paid by these bonds is included in taxable income. Perhaps @Dheer will be willing to correct any mistakes in the above. So, it may be necessary to check whether (a) the interest income from the bonds was declared on Form 1040 Schedule B for each year (b) whether the appropriate boxes (the ones that ask whether the taxpayer has signature authority over foreign accounts etc) were checked on Schedule B or not, (c) whether Form TD 90-22.1 was filed each year or not (this is the FBAR requirement) Note that if the total value of the accounts is less than US $10K during the entire year, then the taxpayer is supposed to check NO on Schedule B and need not file Form TD 90-22.1.  Also, there is a separate requirement to file a Form 8938 for certain specific types of investments.  There was a two-part article describing these rules in Forbes magazine some time ago, and this is available on-line (Part 1 and  Part II) As @superjessi says, the IRS might be lenient if the only issue is not filing the forms in timely fashion, and the taxpayer is voluntarily coming into compliance even though the filing is late. They are likely to be less  forgiving if the foreign income was not reported, and still remains unreported even after filing the various forms. Of course, you've already realized that some of that is that smaller estates are more common than larger estates.  But it seems unlikely that there are four times as many estates between $10 and $11 million as above that range.   People who expect to die with an estate subject to inheritance tax tend to prepare.   I don't know how common it is, but if the surviving member of a couple remarries, then the new spouse gets a separate exemption.  And of course spouses inherit from spouses without tax.  In theory this could last indefinitely.  In practice, it is less likely.  But if a married couple has $20 million, the first spouse could leave $15 million to the second and $5 million to other heirs.  The second spouse could leave $10 million to a third spouse (after remarrying) and another $5 million to children with the first spouse.  All without triggering the estate tax.   People can put some of their estate into a trust.  This can allow the heirs to continue to control the money while not paying inheritance tax.  Supposedly Ford (of Ford Motor Company) took that route.   Another common strategy is to give the maximum without gift tax each year.  That's at least $14k per donor and recipient per year.  So a married couple with two kids can transfer $56k per year.  Plus $56k for the kids' spouses.  And if there are four grandchildren, that's another $112k.  Great-grandchildren count too.  That's more than a million every five years.  So given ten years to prepare, parents can transfer $2 million out of the estate and to the heirs without tax.   Consider the case of two wealthy siblings.  They've each maxed out their gifts to their own heirs.  So they agree to max out their gifts to their sibling's heirs.  This effectively doubles the transfer amount without tax implication.   Also realize that they can pretransfer assets at the current market rate.  So if a rich person has an asset that is currently undervalued, it may make sense to transfer it immediately as a gift.  This will use up some of the estate exemption.  But if you're going to transfer the asset eventually, you might as well do so when the value is optimal for your purpose.   These are just the easy things to do.  If someone wants, they can do more complicated things that make it harder for the IRS to track value.   For example, the Bezos family invested in Amazon.com when Jeff Bezos was starting it.  As a result, his company could survive capital losses that another company might not.  The effect of this was to make him fabulously rich and his parents richer than they were.  But he won't pay inheritance tax until his parents actually transfer the estate to him (and I believe they actually put it in a charitable trust).  If his company had failed instead, he still would have been supported by the capital provided by his parents while it was open (e.g. his salary).  But he wouldn't have paid inheritance tax on it.   There are other examples of the same pattern:  Fred Smith of FedEx; Donald Trump; Bill Gates of Microsoft; etc.  The prime value of the estate was not in its transfer, but in working together while alive or through a family trust.  The child's company became much more valuable as a result of a parent's wealth.  And in two of those examples, the child was so successful that the parent became richer as a result.  So the parent's estate does count.  Meanwhile, another company might fail, leaving the estate below the threshold despite a great deal of parental support.   And those aren't even fiddles.  Those children started real companies and offered their parents real investment opportunities.  A family that wants to do so can do a lot more with arrangements.  Of course, the IRS may be looking for some of them.   The point being that the estate might be more than $11 million earlier, but the parents can find ways to reduce it below the inheritance tax exemption by the time that they die. Both of you sit down with a lawyer who practices in real estate and foreclosures, and hash out every single possibility of what could conceivably go wrong, with nothing out of bounds.  Come up with a reasonable and fair plan for resolving each situation, that you are willing to commit to, life and breath, for real, no exit.  Put all of it into a legal commitment between you two.  However this is a fearless, searching and even ruthless contemplation, requiring a level of intimacy and personal responsibility you may not be comfortable with. and there's absolutely no room for dancing around unspoken questions.  So in essence, it puts the hardest stuff up-front.  If you put that much thought and honesty into it, you'll probably be OK. But you probably won't want to be that honest, or won't want to do the deal after you do. This is something you should decide as part of entering a partnership with someone. Ideally before you make the initial purchase you have a detailed contract written up.  If you have already bought the house and someone is now ready to move out the easiest thing to do is sell the house. If that is not an option, you'll have to decide on a plan together and then get it in writing. If I hire someone in Utah to do sales for me over the phone, and he   works out of his home, am I required to register an LLC or file my   current one as a foreign entity in Utah? Yes, since you've established presence in Utah. You'll register your current LLC in Utah, no point creating another one. If my sales guy, or I, call businesses in, say, Florida, and sell a   few businesses our services for online work like maybe a website   design, etc. Are we required to file our LLC In Florida as either a   new LLC or a foreign one? No, you need to register where you (your company, including your employees or physical offices) are physically present. You don't need to register in any state you ship products or provide services to. If no-one of your company's employees is present in Florida and you don't have an office/rent a storage there - then you have no presence in Florida. If you actually go there to provide the services - then you do. To the best of my knowledge, Los Angeles County does not require a lawyer to be involved in a real-estate transaction. I looked through the County Recorder site and found no evidence that a lawyer is required. I live in a different county in California where a lawyer is also not required for real-estate transactions. Some counties do require a lawyer to be involved. That said, a purchase contract - is a contract. A legal document which you sign. A realtor may be able to help you understand the housing market pricing trends, but cannot (not allowed by law) draft the contract for you or advise to you on the clauses of the contract you're signing. Only a lawyer licensed in your State (California) is allowed to do that. So if you want a legal advice about the contract you're going to sign - you need to talk to a lawyer. Especially if you want a contract drafted for your own special needs, or have some specific titling requirements (for a company, or a trust - for example). Same goes for the mortgage contract and any other piece of paper you'll be signing during the closing meeting (and there will be plenty of such signatures). So it is not a question of need, it's a question of should. "Your question asks ""how"" but ""if"" may be your issue. Most companies will not permit an external transfer while still employed, or under a certain age, 55 or so.  If yours is one of the rare companies that permits a transfer, you simply open an IRA with the broker of your choice. Schwab, Fidelity, eTrade, or a dozen others. That broker will give you the paperwork you need to fill out, and they initiate the transfer.  I assume you want an IRA in which you can invest in stocks or funds of your choosing. A traditional IRA. The term ""self-directed"" has another meaning, often associated with the account that permits real estate purchases inside the account. The brokers I listed do not handle that, those custodians have a different business model and are typically smaller firms with fewer offices, not country-wide."