This is technically a new entity, as the SMLLC is deemed to contribute the assets to the S corporation in exchange for stock.
This is a carryover basis to the transferee S corporation; however, the basis cannot exceed FMV.
Depreciation does in fact start over with the new basis; transferor's basis.
There are also required statements for both the transferor and transferee under Section 351.
This is why I recommended professional help in the initial year.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
