taxladyworking
Level 3

Yes, I agree this is not what a tax professional wants to be dealing with at this time of year.  I think the following will need to be done. As you mentioned, file amended returns for all years the LLC Partnership filed with the rental property and reflect zero income (no activity). Since the rental property deed is held in the members personal names, I will be filing amended returns for my client for the same years and reflect their share of the income and expenses as well as depreciation on a Schedule E. Additionally, informing the other 3 members to file amended returns with their own tax professional. If someone has another solution as to how to handle this, please advise. 

I also, mentioned in my question that the members sold the rental properties and are now stating the property was received as inheritance, therefore they get a stepped up basis on the sale. I disagreed with this since I remembered it differently. I have found in my archive client file a copy of the Bargain and sell of the rentals and it clearly states that the true actual consideration paid was a gift as well as a copy of the letter sent to all tenants (from the members attorney) that the rental properties were sold to the LLC members.  If they choose to ignore my documents, I will put on those running shoes as suggested.

 

0 Cheers