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New Member
posted Jun 3, 2019 1:25:43 PM

When converting a limited partnership to a LLC, do I still use the start date of the partnership for purpose of depreciating business assets?

Started LP in 1992 and converted to LLC in 2017.  Reading IRS publications  suggests that I continue to depreciate assets as if the conversion didn't happen.  Do others concur with this?

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4 Replies
Expert Alumni
Jun 3, 2019 1:25:44 PM

Yes, the basis of the property remains the same, and accumulated depreciation carries over as well.

Unless you have filed Form 8832 and elected to be taxed as a corporation, the IRS considers the LLC to be a partnership. This is because an LLC is a state-defined entity. Read more here: IRS Limited Liability Company (LLC)

Returning Member
Jul 15, 2019 5:12:05 PM

Turbo tax is not allowing me  to do that, do I just correct the forms?

 

Level 15
Jul 16, 2019 11:54:36 AM

Basically, the only real difference between an LP and an LLC when it comes to taxes, is the spelling. So under the business info tab all you should need to do is change the business type selection from U.S. Limited Partnership, to U.S. Limited Liability Company. Everything else under the Business Info tab (business start date, and the such) would all stay the same. Likewise, nothing changes for the business assets either.

Level 15
Jul 16, 2019 7:29:24 PM

Are we to assume that your partnership LLP was converted to a multi-member LLC ?  Or is it that you disbanded the partnership  and  converted to a single member LLC ?   This is because whereas a multi-member LLC is treated as partnership ( a pass through entity ), a single member LLC is a dis-regarded entity for tax purposes