Gifted Rental

I have a LLC that gifted a building to a church.
Building was rental property for several years.
HUD shows gross sales 650k and down by gross amount due seller the 650k is listed as "Gifted Funds"
Have Appraisal for 650k
I closed out the rental and all assets associated using the date on the HUD. I showed nothing in sales price. That takes the rental out of service and finishes up 2019 income, expenses and allowed depreciation.
They did a water repair for 4k right before the gift date. Not sure what to do with this.
They paid 250 attorney fee for closing costs. Not sure what to do with this.

Now the Gift part. FMV of the building is 650k. Basis is 157k. Where do I show this gift? Does the partnership fill out a gift tax return? Need some guidance here. I know the Sch A donation is distributed to each member on their K-1, but not sure how to make that happen. I know the appraisal must be sent with tax return. LLC return? or each member's?

Any guidance here is greatly appreciated.

Form 8283 gets filed as part of the 1065.

Yes, I did fill out the 8283.

I coded it as Capital gain property to a 50% organization limited to 30% AGI. I have it flowing to the K-1's. I know the Form 8283 goes in with the 1065 and also to each partner. Will send the appraisal with the 1065, but does it go to each partner to send with their returns, too? Is there anything I am missing? or haven't thought about?

I don't think the 8283 has to go to each partner. Check the 8283 instructions.

Your right. It need not go for each partner. .
Just worried that I am missing something that could be taxable. Rental property with depreciation always makes me slow down. All I did was take it out of service by showing the date. Then put it on the 8283 and got it to flow to the K-1's. Limiting the deduction to 30% AGI. I deducted FMV. Anything that I am overlooking?

I am by no means an expert in this area, but I did stumble upon this article recently and it has a few items in there which may not be in an ordinary real estate appraisal.

http://www.marcumllp.com/insights-news/new-irs-regulations-what-constitutes-a-qualified-appraisal

7.The appraiser must include the following declaration in his or her appraisal report: “I understand that my appraisal will be used in connection with a return or claim for refund. I also understand that, if there is a substantial or gross valuation misstatement of the value of the property claimed on the return or claim for refund that is based on my appraisal, I may be subject to a penalty under section 6695A of the Internal Revenue Code, as well as other applicable penalties. I affirm that I have not been at any time in the three-year period ending on the date of the appraisal barred from presenting evidence or testimony before the Department of the Treasury or the Internal Revenue Service pursuant to 31 U.S.C. 330(c).”

8.A statement that the appraisal was prepared for income tax purposes.

Are you positive that the appraisal you have meets the IRS definition of a qualified appraisal? It is not too late to get one, assuming the due date for the tax return has not yet passed...

Thank you Nightsnorkeler. I was not aware of this statement requirement. And, the appraisal I have does not contain this statement. I went back to client and told him to go back to that appraiser and ask for it. Wonder how this will play out? I really only scanned the appraisal. Gosh this job is hard! So glad we have this forum and I appreciate all of you so much.

The appraiser will add the required statements. Does he need to re-do the original or can we just add an addendum to the original appraisal? He is asking me these questions. The appraisal was done in September and gifted in November.

Bringing to top. Do you think it is OK to add an addendum to the original appraisal or does the entire appraisal need to be redone to include the statement that Nightsnorkeler referenced.

Just found out the donee paid for the appraisal. Not the donor. Does that make a difference?

Do you think it is OK to add an addendum to the original appraisal or does the entire appraisal need to be redone to include the statement that Nightsnorkeler referenced

I would suggest that you read Reg 1.170A-13(c)(3) https://www.law.cornell.edu/cfr/text/26/1.170A-13 to make sure that the appraisal meets ALL of the requirements. The post I made earlier was just a small portion of the requirements which I posted to make you aware of the fact that the IRS is very particular about what a qualified appraisal contains.

It would also probably be a good idea to have the appraiser read the Reg and certify that the appraisal was prepared in accordance with IRS rules rather than you telling the appraiser what needs to be included. If the appraiser does exactly what you say and something is missed, now it is on you for providing incomplete information. If this appraiser is not familiar with preparing an IRS compliant appraisal I'm sure there are many others out thee who are.

I don't know if an addendum to the original appraisal would be sufficient or not, but I certainly wouldn't risk losing a $625,000 deduction by not spending possibly an extra 1,000-1,500 for a complete IRS acceptable appraisal now.