Depreciation after transfer to LLC

[Randall]

Two brothers owned rentals, reported half each on Sch E.  Formed an LLC, transferred property to LLC.  My understanding is that the assets and depreciation just continue from their original depreciation schedules.  But I can't 'quickly' find verification of that.  I don't think the LLC starts over with previous NBV.  Just looking for some reference.

[michaelmars]

continue with same depr schedule

 

[jklcpa]

Agree with Michael.  Nonauthoritative, but pub 946, page 47, see "Property Acquired in a Nontaxable Transfer".

 

[Randall]

Thanks.  I agree but was racking my brain to find where it actually says so.

 

[kcjenkins]

You must depreciate MACRS property acquired by a corporation or partnership in certain nontaxable transfers over the property's remaining recovery period in the transferor's hands, as if the transfer had not occurred. You must continue to use the same depreciation method and convention as the transferor. You can depreciate the part of the property's basis that exceeds its carryover basis (the transferor's adjusted basis in the property) as newly purchased MACRS property.