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Step up in Basis for Partnership

Technical topics regarding tax preparation.
#1
RowTax  
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147
Joined:
15-Jan-2018 3:45pm
Location:
Florida
taxpayer and spouse are equal owners in rental property partnership LLC
member shares held in a revocable trust
taxpayer dies during the year,,, wife inherits through the revocable trust.. it remains in the revocable trust and it remains a disregarded entity for tax purposes

no longer a partnership LLC (now a one member- spouse) and must be reported on personal schedule E, form 1040 for the after death period... and a short year partnership year from 1/1/18-date of death. Then it all gets reported on spouses schedule E.

question...

Spouse should get a step up in basis......We are assuming that step up ends up in her depreciable basis on the rental property on her Sch E.
 

#2
Noobie  
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930
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22-Apr-2014 1:35pm
Location:
Jacksonville, FL
Yes to step up. Yes to depreciable. Makes sure to separate step up in land (non-depreciable), and step up in Building(depreciable). You will want client to get support for the stepped up value (appraisal, etc), and remember the step up is only for 50% of the property, and not 100%.
 

#3
jaxtax  
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2
Joined:
27-Nov-2018 10:19am
Location:
usa
the partnership is an LLC.... is the 1/2 step up in basis the surviving spouse's basis in the LLC itself = outside basis
or the underlying asset, depreciable building, which will now be reported as a sole member LLC rental on 1040, Schedule E?
 

#4
jaxtax  
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2
Joined:
27-Nov-2018 10:19am
Location:
usa
is the 1/2 step up in basis to the surviving spouse at the LLC level = outside basis
or to the underlying rental real estate itself which will now be reported as a sole member LLC on form 1040, Schedule E..
with new 40 year life and no accumulated depreciation?
 

#5
Noobie  
Posts:
930
Joined:
22-Apr-2014 1:35pm
Location:
Jacksonville, FL
It would be on the Schedule E as a depreciable asset with the other rental property items.
 


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