Moving property from S-Corp into LLC
I have a couple S-Corp owned properties that I bought as short-term projects but then ended up keeping due to the current market. I also have a number of LLC owned properties that I want to keep for a long time.
I'm thinking it would be much easier just keeping it all in the LLC, but I want to understand tax implications as I am thinking this needs to be an arms-length transaction.
1. Determine fair market value on each property.
2. Sell property from S-Corp to LLC, accounting for depreciation, original price, etc.
3. Close out property in S-Corp.
4. Record property as brand new in LLC, start with FMV as purchase price of property, restart depreciation, etc.
Seems like a lot of hassle, but am thinking this is the way IRS would want it done.
Thoughts ....?