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Depreciation

This is the scenario Rental Property-Purchased thru a Partnership in 2003. I held 51% interest in the Partnership. On 12-31-07 I bought my partner's 49% and placed it in the name of my Revocable Living Trust in order to avoid changing the deed from the Partnership name. The IRS no longer recognizes it as a Partnership (since my RLT and I are the same tax entity).

Question: Is it acceptable to depreciate the first half as usual and the newly purchased half according to the new basis? I understand that normally buying out a portion of a Partnership would not alter the basis of the Real Estate the Partnership owns. However, this is the only asset of the Partnership and if the IRS will not recognize it as a Partnership anyway...wouldn't that make it acceptable to figure it with the new basis?

Reply to
zl1515
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wrote

Since the building didn't change hands........no.

Looks like you have your answer.

Any new owner/partner buying in at any amount would not change the basis in the asset.

And that asset - the building - isn't what you bought.

Reply to
Paul Thomas

Thanks - this clears up for me what the OP was doing (I think). So, if this was me, I would want to get rid of the "partnership with self", and hold the property itself in my living trust. What are the tax issues here?

And, what was the purpose for not doing this in the first place? A savings in property taxes?

Reply to
Gil Faver

On Mar 26, 6:05 am, "Gil Faver" >> Revocable Living Trust in order to avoid changing the deed from the

I did not keep the partnership for tax purposes. I kept it for privacy purposes....makes it harder for a tenant to find where I actually live (they are low income apartments..I have had problems before).

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Reply to
zl1515

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