Tax basis and LLC


L

lrae20

I have been part of a general partnership that owns a piece of rental
property. I have recently bought out my partner. I plan to transfer
the rental real estate into an LLC. My question is whether this
transfer will provide a stepped up basis on the property.
 
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T

Tom

I have been part of a general partnership that owns a piece of rental
property. I have recently bought out my partner. I plan to transfer
the rental real estate into an LLC. My question is whether this
transfer will provide a stepped up basis on the property.
You can get a "step-up" for the premium you paid for your partner.
Assuming you two were equal partners (and the only partners) your
purchase of his units terminated the partnership. A transfer to an
LLC will not result in a step up of the basis of the underlying
property.
 

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