Depreciation from individual to partnership/LLC

[Armin Shivazad]

Hi all,

I had purchased a long term rental in 2022 with myself and spouse as the original owners. We took the depreciation on our personal tax return in 2022. We transferred the title of the property to an LLC where both myself and spouse are 50/50 partners. We reside in FL. This year (2023) we are trying to figure out how to do the tax return for our partnership/LLC because the previous year (2022) the depreciation was on our personal return but now the depreciation needs to be on the partnership. How can we move over the prior depreciation from personal return to the partnership?

Thanks for your time in advance. 

[Jason Watson]

Yup, Mary is spot on. 2022 is good to go. For 2023's tax returns, you can simply remove the activity entirely from the tax return including the assets, or you can make them inactive / out of service for legacy purposes.

You might have a passive loss carryover on Form 8582. You would also want to move this to the K-1 activity on your 1040 tax return so future net rental income (profit) can be reduced by prior disallowed losses.

Happy to help.