I have numerous questions - even insight into a single question would be useful. I am filing a 1065 for a 4 member LLC (equal ownership %'s). One member (#1) died and another member (#2) bought out the dead member's share at FMV price. The FMV price was higher for both the rental house and gas/oil producing assets.
(1) How do I properly account 'buyout of the dead member' - [handle 'internally' within LLC] was this a contribution (from #2) to the LLC with a balancing distribution (to #1) from the LLC or was this a sale (by #1, with associatedCapital Gain) and then re-purchase (by #2, with associated increase in Capital Account Tax Basis) of the assets.
(2) How do I recognize the increase in FMV on the Assets balance sheet - are 100% of the LLC assets re-valued or do 75% stay the same value and only 25% (#1's share) get increased to FMV. But any re-valuation for the Assets throw the Partners Capital Accounts out-of-balance with Assets.
(3) I assume that the IRC Section 754 election [under 743(b) IRC Section] I report/file with the IRS will also contain related info regarding the re-valuation of assets.
(4) How do I handle the House depreciation - is 75% of the House following the old depreciation schedule and 25% (#1's share) following a new schedule [i.e. old value House depreciation for the first few months and then FMV House depreciation for the remainder of the year]. But this seems to entail Form 4797 and recognizing the Capital Gain for #1's share.
(5) The individual member K-1's numbers are no longer in sync with the default of 'member ownership % * # of days / 365' - so I need to override the default. Will this trigger Errors that will dis-allow e-filing of the return?
Any help or direction would be greatly appreciated.
