I’m a bit confused about inside/outside basis and equity for the multi-member LLC taxed as partnership. Simplified my case to the following scenario.
Partner A:
Contributed $1MM cash.
Partner A capital account-$1MM.
Partner A outside basis-$1MM.
Debit cash $1MM, credit A equity $1MM
Partner B:
Buys $1MM building cash, next day contributes building to the LLC
Partner B capital account-$1MM
Building B inside basis $1MM depreciation term 27.5yrs
Partner B outside basis $1MM
Debit fixed asset building $1MM, credit B equity $1MM
Partner C:
Bought building 27.4yrs ago for $100K. Depreciated for 27.4years, adjusted basis = $303
Contribute bldg into partnership, building's current fair market value $1MM
Partner C capital account $1MM ??
Building C inside basis $303 depreciation term 0.1yr
Partner C outside basis $303
How would this be recorded in the books? Debit fixed asset building $303, Credit C equity $1MM won't work
All contributed $1MM but from A’s perspective both buildings are not equal, partner Bs building is much more “valuable”, as LLC can depreciate building B but not C. Or if LLC decides to sell both buildings the next day. Building B is a wash, but on building C partner A will be on a hook for capital gains on his share (33%) of the buildings $1MM value? What am I missing here?
