Transfer your Rental Properties.
Should you transfer your rental properties to your corporation?
The benefit of transferring your rental properties from your personal name into your corporation is that it limits your personal liability. If tenants were to sue you, for example, they would only be able to access the assets within your corporation – not your personal assets. This provides peace of mind and protection in the event that something goes wrong.
Another benefit is that it can be easier to get financing for a rental property that is held in a corporation. Lenders may see the corporation as a more stable entity and be more willing to provide financing at better rates.
If you are thinking about transferring your rental property into your corporation, it’s important to talk to a lawyer or accountant to get professional advice on the matter.
Is there any Drawback to transferring your rental property to your corporation?
There are a few potential drawbacks to holding rental properties in your corporation. One is that you may have to pay land transfer tax when you transfer the property into your corporation’s name. Another is that any capital gains you realize when you sell the property will be taxed at the corporate rate, which is higher than the personal rate.
The only way to get around paying taxes on Capital Gains is to do a section 85 rollover, which can be costly.
You may also have to pay a professional to set up your corporation and file annual corporate tax returns, which can add to the costs of owning rental property in a corporation.
Overall, whether or not you should transfer your rental property into your corporation depends on your individual circumstances. Talk to a professional at BBS Accounting CPA before making any decisions.
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