Have a client who formed an LLP (LLC taxed as a partnership) with a friend to purchase property years ago consisting of an old farm with a cabin on it. Subsequently subdivided the acreage into lots and sold off all lots -- but kept the cabin & surrounding partial acreage for their own use. The LLC continues to exist, but they do not intend to sell this remaining parcel. None of the cabin's expenses of upkeep were ever deducted or shown on the return. My question is, can the property just be deeded to the two owners personally and therefore terminate the LLC? Or does the same thing happen as if this were a corporation -- would it be treated as a sale at FMV? They are the only 2 members.
-
Last edited by Burke; 09-17-2009, 03:11 PM. -
SeeTTB pg 20-10
I don't think the property is distributed at FMV. I think it retains the same basis it had in the partnership when it passes to the partner in a liquidating distribution. -
Looks like it to me, too. Thanks!Comment
Comment