How do I transfer rental property from Schedule E to Form 1065

[birdlui]

My husband and I formed a LLC in 2018.  We have 3 rental property under our name and filed on Schedule E in the past.  We moved those property to the LLC and need file 1065 this year.  How do we remove those rental property from schedule E?  Does the new basis on the form 1065 should be the original cost basis less depreciation already took?

Thanks,

[MarilynG · Accepted solution]

If you choose to report the properties on Form 1065 and then enter each of your K-1's into your personal return, you are correct that you would enter the new basis as the original cost less depreciation taken. 

Report the Rental Properties as 'converted to personal use'  in the Rental Section (Property Profile and Assets/Depreciation section). 

However, if you and your husband are the only members of the LLC, you could be considered a 'disregarded entity' by the IRS and are not required to File Form 1065.

You would still use Schedule E to report your Rental Income and Expenses in that case.

Here's more info:

https://ttlc.intuit.com/replies/3599270

[cstoney04]

then, assuming you transferred them to schedule k-1, would you delete the properties from your schedule E in subsequent years?  The home/Business software does not speak to the business version; so it seems this is a manual adjustment.  Or do you continue to carry them on your schedule E?