@NerakMac wrote:
I have a rental property that I have had for 18 years. In April of 2018 I took on a partner to redevelop the property and we formed a new LLC and I transferred the property to that LLC. For 2018 I will have income and expenses for the property through April and then get a K1 from the new entity for the rest of the year. In TurboTax do I add the new LLC as a new property or is that business dealt with elsewhere?
You really should seek professional tax guidance and legal counsel with respect to this transaction.
Effectively, you have a new entity, the LLC, with a new member (owner) and a separate, initial income tax return will have to be filed for the entity (Form 1065). Each member's contribution of property, cash, etc., will have to be recorded and tracked and you should absolutely have a partnership agreement drafted by a legal professional tailored to your specific set of facts and circumstances.
Additionally, you will have to show the transfer (whether it was for cash or other consideration) on your personal income tax return. You will not, however, add the LLC as a "new property". Rather, you will receive a K-1 from the LLC and enter the information from that K-1 into your income tax return. In subsequent years, the LLC will appear in Part II of your Schedule E but the rental property will not (it will appear on Form 1065 and related schedules filed on behalf of the LLC).
