[gamblor956]

Even though your LLC didn't make money, it made your IP. Your C corp technically has to buy that IP from your LLC - which cost something.

That's likely wrong (at the federal level, at least). Single-owner LLCs are disregarded for tax purposes unless they expressly choose to be treated as corporations, so generally for tax purposes an LLC's owner is treated as directly owning all of the LLC's assets (and as directly earning all of the LLC's income). Contributions to a C-corp are generally tax free (see, e.g., IRC 351). State tax regimes may differ.

[mbesto]

I'm a bit confused here? The OP basically said "your LLC created the IP and now a C-Corp owns but it never legally transferred it". IANAL, but from what they've told me, if IP is transferred from one entity to another you must make a transaction. You can't simply say "I made this so wherever I go to next, that entity owns it"

Source - I've had the same situation and discussed with a lawyer.

[gamblor956]

Legally, his comments were partially correct in that the LLC would own the IP prior to the transfer. But tax-wise, they were completely incorrect--a single-member LLC generally does not exist for tax purposes, and it is generally possible (even trivial) to transfer the "LLC's" assets to the C-Corp without incurring any tax liability. (A transaction occurs in this sort of situation, but generally it doesn't result in any "costs" or taxes due).

[stevoyoung]

Thanks for the clarification.

[mbesto]

Gotcha - good point.