LLC Owners Can Secure Debts With Biz Property, IRS Says

Law360, New York (February 5, 2014, 5:27 PM EST) -- When taxpayers wholly own a limited liability company that owns real property, they can now treat that property as their own to secure a debt, according to an Internal Revenue Service rule released on Wednesday.

The IRS said that it wrote Revenue Procedure 2014-20 to create a safe harbor for indebted taxpayers who wholly own any business that isn’t a C corporation, which have different tax treatments than noncorporations owned by one person.

Although mortgages are most commonly used by lenders to secure an interest in...
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