Does depositing stocks into a single member LLC incur a capital gain? The stocks will not be sold. I have searched for this but cannot find an answer.

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    Is this LLC a disregarded entity for tax purposes? Commented Nov 12, 2021 at 18:04
  • Yes. Well, I don't know if I need to specifically declare this. But I am the sole member. No one else owns any percentage of it. So I was hoping the answer to my question was "Obviously there is no capital gain because it is a 'pass through' entity." Commented Nov 14, 2021 at 0:55
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    If you don't know exactly what type of entity the LLC is, then there is no way you could prepare or file taxes. But most likely, it's a disregarded entity. In that case, the LLC does not affect your taxes at all and the taxes are the same as if all the LLC's assets were yours personally. Moving assets to and from the LLC is not taxable because the LLC's assets are your assets for tax purposes already. Commented Nov 14, 2021 at 1:02
  • Ok thanks, this is what I was looking for. Some sources online say "For income tax purposes, an LLC with only one member is treated as an entity disregarded as separate from its owner unless you file a form to become a corporation." So I'm pretty sure it is a disregarded entity. Commented Nov 14, 2021 at 4:37

1 Answer 1


No capital gain, as long as the LLC will not be an investment company (e.g. with marketable securities making up 80%+ of its assets) and if you follow some other related rules:

Article [PDF]

In many instances, property can be contributed to an entity by its owners in exchange for ownership interests, without gain or loss being recognized on the contribution.


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