How to leverage loss deductions when transferring FLP or LLC interests

Description

Abstract: Real estate investors who hold properties in a family limited partnership (FLP) or limited liability company (LLC) are likely making transfers of ownership interests to family members in an effort to “shift” income to those in a lower tax bracket or to tax efficiently transfer wealth to the next generation. But, in the current economy, some properties held by an FLP or LLC may be generating operating losses. This article shows how one can still make a gift of an FLP or LLC interest and maximize the benefit of loss deductions.