You move the assets to your personal return under your sole proprietorship as though they were always yours. The cost basis and depreciation will be 50% since you were a 50% partner. You set up the same year placed in service, the original cost basis and the prior depreciation that has been used on the partnership return. It's a 'related party' rule.
The assets retain the same character as if you had always been depreciating them except that you will use 50% of cost and prior depreciation.
Note: If the assets were inherited by you, then you will also enter as new assets the stepped up basis which is 50% of the FMV of the property on the date of death of your father.
Review the short tax year for partnerships if it was dissolved before December 31, 2021, if applicable.
Click here for a similar situation that may provide useful information from our Tax Champs about Community Property states if applicable.
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