Moving rental house asset from joint ownership to llc

[roland241]

Rental house used in service on 1/1/14 by married owners. Contributed to LLC by same owners on 1/1/24. House has no debt. How do you continue the depreciation schedule in Turbotax Bus. It won't allow an in-service date prior to entity formation. Should we subtract the Prior accumulated depreciation from the "cost" and place it in service on a new schedule?

[PaulaM · Accepted solution]

No, continue the same schedule as before. See if the steps below will work for you.  First grab your depreciation records for tax year 2023. Should be labeled Depr. Report in your 2023 records. 

On your partnership return in the Business Info section, enter the start date of your business as 1/1/2014

Then go to the Asset Entry section for your rental and enter your rental house as an asset, the 1/1/2014 start date, it's purchase price and land costs. Next page should give you the accumulated depreciation and AMT amounts. Compare to your 2023 records and edit the amounts if needed. 

Now go to Forms view and locate the Depr. Report from the left panel to verify the accumulated amounts and the 2024 depreciation expense. And finally, go to the top of the left panel in Forms view and select Information Wks. Change the date for 'Date Business started' back to 1/1/2024.

Note: The purpose is so your accumulated records stay intact for the correct amounts prior and going forward. Accumulated amounts come into play later when the assets is disposed of. If you have more than one asset to enter, wait until you have entered all of them before you change the 'date business started' back to 2024. I also made the assumption that you do not live in a community property state. 

[roland241]

Your work around worked beautifully. All correct now. Thank you.