It depends. The rental real estate property will simply transfer to the C-corporation exactly as it is in your hands due to the related party rules. The property is the exact same in the hands of the C-corporation as it is in your hands. When it is sold in the future the C-corporation will apply the depreciation recapture as if it was it was still in your hands. Likewise the depreciation will continue as if nothing has changed.
Related persons.
Under these rules, related persons include, for example, you and a member of your family (spouse, siblings, parent, child, etc.), you and a corporation in which you have more than 50% ownership, you and a partnership in which you directly or indirectly own more than a 50% interest of the capital or profits, and two partnerships in which you directly or indirectly own more than 50% of the capital interests or profits.
- .An exchange structured to avoid the related party rules is not a like-kind exchange.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
