Business & farm

Some follow-up comments:

• I believe you need to meet with some professionals to have everything documented correctly.
  
  • Attorney for possible title changes as it's not clear on how the property is titled
  • Tax professional to discuss prior year incorrect tax handling.  Maybe just move forward as noted below.
• When the multi-member LLC was created "for the rental", at that time you needed to contribute the property to the LLC; and the property should have been titled in the name of the LLC.
• Then you should have technically been filing a form 1065 and issuing a K-1 to the member's.
• The end result would essentially be the same, but the form of how this was being handled was not correct, at least based on the limited facts.  
• Since you were not filing the form 1065, you could get hit with penalties for not filing the form 1065 timely, and possible a couple of other penalties.  These could possibly be abated through some correspondence, but one never knows with the IRS.  
• Since you used 9/2023 on the EIN, then that is the date I would use for the 1065 start date.
• This means you would have part of the year on Sch E as you have done in the past, and then from 9/6/2023 the activity would be reflected on the form 1065.
• Depreciation would be a "step into the shoes" type transaction; meaning nothing changes.  However you would need to transfer all the property into TT Business for depreciation to be handled correctly for the 2nd part of the year.
• As noted above, it may be in your best interest to have a tax professional help you get started in the right direction for this initial change year.