Hi, my client husband and wife owned rental properties for several years, for legal protection purpose, now they set husband and wife 50%/50% owned LLC's and transferred properties to the LLC.  IRS issued tax ID and 1065 tax return need be filed.

They are not in Community property state, assumed they cannot report rental properties on their Sch E as SML.

How should the transfer transactions record on LLC's book?

1. Record cost and original purchase date and accumulated depreciation at date of transfer?
2. How to record appreciation (FMV - Purchase Cost)? 

   Is there any recording required for the market value of the property in excess of cost or basis on the date of transfer.

1. Record mortgage payable the husband and wife (borrower) because the mortgage was not refinanced in LLC’s name.

  How to record the liabilities if mortgage for those not refinanced to LLC's name, still in owner (husband and wife's name)

Thanks in advance!