Does depreciation start over when you move a property into an LLC?

Forum|Forum|1 year ago
January 27, 2025
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In 2024 I moved my rental properties into individual LLCs. One of those properties is owned by my brother and me. Multi member LLC and I'm starting to fill out the 1065. In the depreciation section, the purchase date of the property is 2018 and the LLC started in 2024. TurboTax won't allow that. How do I handle the depreciation?

Shannon B1

Here’s how to handle the depreciation:

Calculate your basis in the property before the transfer. This should be easy if you have last year's depreciation schedule. If you don't, the formula for calculating the basis is:

Purchase price

Plus: selling expense/other adj

Less: Depreciation

Adjusted Basis

Use this as your new basis for the property on Form 1065. The transfer date in 2024 will be the purchase date.

AmeliesUncle

@Shannon B1 wrote:

Use this as your new basis for the property on Form 1065. The transfer date in 2024 will be the purchase date.

No, not for a Partner's contribution to a Partnership. It continues on using the original Basis, original placed in service date and the prior depreciation.

TurboTax is faulty and gives errors. You need to know how to do work-arounds to avoid the error messages.