I have several rental properties with a partner we are members of an equally owned LLP and file our taxes as such, each receiving a K1 using turbo tax.
am looking to buy him out this year. I would probably just buy all the shares of a LLP converting the LLP into a single member LLC.
A couple of questions I have: 1. When I do this will I be able to put these properties on to my schedule E like the other properties I already hold in my own name?
2. How does the depreciation work on that? Do we both do depreciation recapture does just he do that? Is that put on our final year of business taxes (closing the business)? Do I carry the depreciation I had over to my schedule E? ... So many questions!
3. How does the price that I pay to buy out the LLP work in regard to taxes? ( For example if I paid him $100,000 buyout the LLP)? Does it get added to cost basis of properties, do I split it across the 5 properties we own? Etc.
Note we use multiple turbo tax products for business and personal/rental. I want to simplify tax time with this buyout for years going forward. e.g. one version of turbo tax, all properties on my schedule E.
This public form is not the best place for such advice ... please seek local professional guidance in this matter so you can get the partnership closed properly and legally. Also ending the partnership prior to the end of the tax year will require a short year return to be filed ... again seek local assistance as this can be tricky for the lay person. May I suggest an attorney that deals with tax law for your situation.