How To Transfer Rental Property to LLC

Transferring a Rental Unit into an LLC and Obtaining a Basic Business License in Washington, D.C.

Transferring a rental unit into an LLC and obtaining a Basic Business License (BBL) in Washington, D.C. involves a series of structured steps to ensure full compliance with local regulations. The process begins with the registration of your LLC’s corporate and trade name. This is followed by registering with both the Internal Revenue Service (IRS) and the D.C. Office of Tax and Revenue to establish your business for tax purposes. Subsequently, you must register with the Office of the Zoning Administrator to verify that your rental unit adheres to zoning laws. The final step is to complete and submit your Basic Business License application, which provides the legal authorization to operate your rental business within the district. By following these steps, you ensure that your rental unit is properly transferred into the LLC and that your business is fully licensed and compliant with all necessary regulations.

Cons:

  • Formation and Maintenance Costs:
    • Initial setup fees and annual filing fees vary by state and can be costly.
    • Ongoing administrative responsibilities, such as annual reports and separate accounting.
  • Complexity:
    • Requires compliance with more regulations and formalities compared to sole proprietorships.
    • May necessitate hiring professional services for legal and tax advice.

Steps for Transferring to LLC

Requirements for Rental Property Licensing in Washington, D.C.
  1. Corporate Registration: If applicable, register your corporation. Try to use the property address as the name for your LLC.
  2. Tax Registration: Register with the IRS to get an EIN and then provide your EIN to the D.C. Office of Tax and Revenue to ensure proper tax registration.
  3. Basic Business License: Obtain the necessary business license.
  4. Inspection Requirement: You need to schedule an inspection with the D.C. Department of Buildings. Meet all inspection requirements.
  5. DHCD-Stamped Registration: Register with the Department of Housing and Community Development (DHCD).

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