Basis of property contributed to LLC in initial year

[MS]

We transferred 4 rental properties into 4 disregarded LLCs and then have a Master LLC to file the 1065. As an example one property has an adjusted basis of $65,000 (cost of $115,000 less $50,000 depr). FMV of $225,000.

On the 1065 initial year, it is my understanding that the Schedule L would show the property at $115,000 less $50,000 depreciation netting the $65,000 AB. On quickbooks pro the same has been reflected so books are same as tax basis thus far.

Given this, the schedule M-1 would have no differences and the Schedule M2 would also be showing the adjusted basis of $65,000 as property contributed. 

Would this be correct or should the books reflect the FMV of $225,000?  If $225,000 is reflected in QuickBooks Pro what would you base depreciation on, the FMV or what was actually taken on the 1065?  If it is based on FMV then the schedule M1 would have an amount in line 4a for the different depreciation amounts.  Is this correct?  

Thanks in advance for responses!

[Rick19744]

Need some clarification here before I can provide guidance.
You indicate "we" - can you provide more detail here; is this 2 individuals, 4 individuals, etc"
Is the "we" husband and wife?  If yes, are you in a community property state?
Is it a safe assumption that the single member LLC's are owned by individuals?

[MS]

2 individuals, husband and wife
florida not a community property state
the Master LLC is owned by husband and wife
each property LLC is owned by the master LLC

[MS]

Hope that helps...

[Rick19744]

Ok.  That simplifies many things.

1. Since you are husband and wife, most likely filing a joint tax return, you do not have to worry about contributing property where the adjusted basis differs from the FMV.  Section 704(c) can be tricky.
2. You are correct in that the adjusted basis of the property carries over to the LLC as does depreciation method and remaining life.
3. In addition, as you stated, there would be no book to tax difference in depreciation.
4. Since the property was contributed by a single member LLC owned by an individual, your K-1's should be reflected as if owned by you individually; disregarded for tax purposes.
5. You really don't have a "master LLC".  A master LLC comes into play in a Series LLC context which you do not have (thankfully).  You just have a regular multi-member LLC.