Selling half of a aircraft

I will be selling half my F1 Rocket to a former partner in a prior aircraft. He is already on the insurance. We will set up a LLC at a later date. What is required to transfer 50% ownership at this point. Is it as simple as a bill of sale or does the aircraft require a new registration. I know for the LLC it will have to be registered.
Thanks!
G

If they want their name on the title as co-owner then yes registration is required. Something to consider though too is sales tax as the transfer to the LLC might constitute another sale. Maybe switching it now or at least looking at it now might help out there.

Create the LLC, then name you two as the managers of the LLC.

tgibbs said:

Something to consider though too is sales tax as the transfer to the LLC might constitute another sale.

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you may be able to avoid sales tax all together by structuring the transaction correctly. You likely could transfer the plane to an LLC you own 100% tax free. Then in the future sell half of the LLC to your partner, note that you don't want to do this concurrently or the taxing agency may try to unwind the transfer and charge the tax if they feel it's all part of the same transaction. I would check with a competent CPA or attorney familiar with NC sales tax laws to verify.

tgibbs said:

If they want their name on the title as co-owner then yes registration is required. Something to consider though too is sales tax as the transfer to the LLC might constitute another sale. Maybe switching it now or at least looking at it now might help out there.

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Spoken like a true Kalifornian! ;-)

-Marc

odens_14 said:

you may be able to avoid sales tax all together by structuring the transaction correctly. You likely could transfer the plane to an LLC you own 100% tax free. Then in the future sell half of the LLC to your partner, note that you don't want to do this concurrently or the taxing agency may try to unwind the transfer and charge the tax if they feel it's all part of the same transaction. I would check with a competent CPA or attorney familiar with NC sales tax laws to verify.

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I did this exact thing in Maryland. Transferring an aircraft you own into an LLC you own is not considered to be a state tax event (at least in MD). The state doesn’t track ownership of the LLC beyond the registered agent, so it was no issue to create a new partnership agreement to reflect the new partner. Since there the LLC did not generate revenue, and the purpose was strictly for limitation of liability, there was no State or Federal income tax filing required.

MD does charge a $300 annual filing fee however. Not every state does that.