1065 questions deceased partner and property contributions with heirs/new members

[kdmaul]

My mother had cropland and a home in an LLC, which transfered to me and my sister on her passing 50/50.  She died in March.  I am doing the 1065.  My questions are

1. Do I put her in as a member/disregarded entity that left the LLC during the year.

2. Do I list the value of the cash in the business account and the values of the land/house as contributions made this year by my sister and I?

3.  As this is the first 1065 done with this LLC (as she was the only owner in years past) do I make the date for the return for the whole year or from the time it went from a sole owner to a multiowner partnership?

4. Due to the value of the land I have to do a balance sheet.  Since this is the first 1065 do I just leave the starting year column blank?

We will be selling the house so I need to make sure I get the cost basis correct so we don't run into tax issue.  I am aware of the step up valuation so I did get an appraisal done.

[KeshaH]

My condolences on your mother's passing.

You would not include her as a disregarded member of the partnership since the partnership was not created until after she passed and no longer owned the LLC. The partnership is a new entity with you and your sister.

Any business related income earned or expenses incurred before her death would be included on her final 1040. Everything after that would be included on the 1065. 

The first return would be a short year from March to December 31, 2024.

You would leave the starting balances on the balance sheet blank and show the cash, land, building, etc as contributions.