This only applies ***IF*** a transfer of ownership was actually registered at the courthouse, thus changing the name of the owner on the deed. It also does not apply if ownership of the first LLC and ownership of the second LLC are the same partners.
You must reduce the cost basis of the property by the amount of depreciation already taken in the first LLC, and use that reduced cost basis in the new LLC. Depreciation will start over from year one, using the reduced cost basis.
Take note that only the cost basis of the structure will change. Since land is never depreciated, the cost of the land does not change.
