Buying into a fully depreciated property...options?

[Nick Drury]

My business partner owns a large multi-family property that he’s offered I buy into in the near future. I’m very interested in the deal, but he’s owned it for a long time and there is very little depreciation remaining beyond ongoing capex.

Are there any ways to buy into an existing LLC that would provide me as a new LLC partner depreciation to shelter my gains for years to come (effectively resetting depreciation for me) but wouldn't require my partner to sell the property to a new LLC we setup together, exposing him to significant taxes on his gains?

Thanks for any input!

[Eamonn McElroy]

From the legal side (you should be talking to an attorney as well), it might be smart to have him liquidate the LLC and contribute the property into a new LLC for a fresh start.

If you buy into his LLC, you're buying into potential unknown off balance sheet liabilities and lawsuits.