Selling rental property, but our LLC will be retaining tools and equipment that were listed on the property's Form 8825

[john9-9]

We are selling a rental property owned by our LLC. After it is sold, the 1065 Partnership will be retaining tools and equipment that were purchased over the years and listed on this particular property's Form 8825 (Rental Real Estate and Expenses). This was mainly because we did not know where else to put them. Of course, the appliances, and depreciable items related directly to the building will be sold with it and accounted for after the sale. The Partnership will still be generating income from investments and will be considering purchasing another property eventually. We guess the real question is how to move the retained tools and equipment to the LLC without incurring a taxable event? We use Turbo Tax Business. Thanks

[RobertB4444]

if the tools are fully depreciated then it isn't any worry.  Remove the asset along with the rental house and just enter any gain if they are ever sold.

If the tools still have a depreciable life left then dispose of them in a separate sale from the property for the exact amount that they have left in value.  Then create a completely new asset that is identical to the one that you disposed of and attach it to the LLC itself instead of the property.

@john9-9 

[john9-9]

Excellent Thank You.

[john9-9]

We are having difficulty determining where to enter the tools and equipment we are retaining. Turbo tax wants an address associated with the asset when entering it. The items are no longer associated with a particular property but with the LLC. We are unsure of the dates to use, disposal method etc. Some items are not fully depreciated. Details really would be appreciated.

[DaveF1006]

Use the address of your LLC. To report the tools and equipment accurately, you will use the dates each were put into service. You may group these if some were put in service on the same date.  If not, you need to list them separately. 

As far as Depreciation method, please use the method described in this Turbo Tax article as a guide. Most tools would be depreciated over 7 years and equipment may vary depending on the type of equipment you have. As you enter the information, the program may ask if there was prior depreciation taken and the amount.  If not, then you may need to determine how much the items that are not fully depreciated are worth now and then begin a depreciation schedule for these items. 

Hopefully this will be a guide and if you have additional questions, please reach out.

@john9-9