Get your taxes done using TurboTax

The first issue to resolve is what happens to the PAL Carryover when you transfer the rental property to an LLC that is not a disregarded entity.

The answer is that it remains with the individual on their personal tax return.  See this link to The Tax Advisor. See the section Carrying over suspended passive activity losses in exchange and Example 3 that follows.

You will then delete all the personal rental real estate that currently exists on your personal tax return from Sch E.

Following this, you will enter your rental income activity through the LLC'S k-1 in the K-1 input entry.

As you go though the screens, you will reach Describe the Partnership    Check off as illustrated. Following this screen, you will go to the next screen and enter your carryover figure.

 And you subsequently find the carryover figure on your Form 8582.