The form 1065 uses the 8825 but the K1 issued by the partnership/LLC will go on Sch E of the 1040. Also, couldn't the owners and the LLC have a written agreement to transfer the property to the LLC. An unrecorded agreement which means if the LLC is supposed to protect the owners from liability, it probably fails why the did it but does tax code require recorded deeds. Seems my business law professor just said property transactions needed to be in writing. We don't give legal advise but we'd let them know that for the liability shift to be effective they should record the property transfer.
