Sale of LLC - Capital Gain?

Mar 18, 2021 Last reply: 5 years ago 2 Replies

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Stuart O. Bronstein 5 years ago

The owner of a business set up an LLC and transferred ownership of the business into the LLC. He then (within one year) received an offer to purchase the LLC, which he wants to accept.

If this LLC is taxed as a single-person disregarded entity, is the sale of the business owned by the LLC a capital gain (short term in this case)? Or is it treated as disregarded and handled like the sale of any other business?

Thanks for any insight you may have.

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John Levine 5 years ago

According to Stuart O. Bronstein snipped-for-privacy@lexregia.com:

For tax purposes, a disregarded single member LLC does not exist.

You can sell its assets, just like you would for an unincorporated business.

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Stuart O. Bronstein 5 years ago

That was my instinct too. But I couldn't find verification, and there are reasons it could be different.

Thanks.

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