the property would sell to the llc and no losses will be allowed to be taken but the gains will. Expenses if not reported, get assumed reported (example, those who failed to depreciate, just lose it). My rental properties all start making income as rents rise, depreciation is not that high over the life and I purchase new properties to offset the income as passive. We were audited for renting at full income to a relative arms length and had to go through hoops to prove it. In the self rental, the income is no longer passive income. Read up on the self-rental traps. Here is one article, AICPA Today has a number too.https://www.thetaxadviser.com/issues/2008/aug/avoidingtheself-rentaltrap.html
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