moving Real Estate to LLC step up?

[schirallicpa]

The LLC is just being created - real estate to be moved to it - but I don't think the LLC gets anything more than the current owners cost basis.  Just wanted to quickly double check

[jklcpa]

1 hour ago, schirallicpa said:

The LLC is just being created - real estate to be moved to it - but I don't think the LLC gets anything more than the current owners cost basis.  Just wanted to quickly double check

It will depend on the tax reporting type that the LLC will use.  Corp, partnership, or disregarded each have their set of rules. This is an older article from The Tax Advisor but may be helpful:

https://www.thetaxadviser.com/issues/2009/oct/contributionsofpropertytoanllc.html

[Lee B]

If the LLC elects to be taxed as a Partnership, then you have to deal with "inside basis" versus "outside basis" which will be different numbers if the partners contribute

real estate to the LLC.  S Corps are usually avoided since any real estate distributed back out to the stockholders  will come out at FMV with the resulting tax consequences.

Lots of both tax and legal issues need to be considered in advance, which is not what actually happens too many times.

[DANRVAN]

20 hours ago, schirallicpa said:

LLC gets anything more than the current owners cost basis

Not unless it falls in into the the disguised sales rules and becomes a deemed sale of the asset to the company.