Rental

[judys3]

I have a tax customer that her husband passed away in 2020.  Their return is simple or so I thought.  We have only had for them retirement, social security and interest.  I have learned they also had rental property that was never included on tax returns.  

She has created an LLC for the rental property in 2022.  My question is.  How do I figure the value of these properties when they haven't owned them for years to put them on her return?

Do I take the appraised value at the time of LLC formation? From the time of his death?

[abctax55]

"Value" is irrelevant.  Unless you are asking about it for possible stepped up basis due to death of the husband?

I'm not clear on the time line of the 'unreported rental', the DOD of husband, and the creation of the LLC.

And what state?  That may/will have bearing on the return needed (or not needed) for the LLC.

And how was title held on the rental property?  That may/will have bearing on the possible stepped up basis question.

Lots of info needed to even start trying to address this 'simple' return.

[sjrcpa · Accepted solution]

Jointly owned prior to his death?

Noncommunity property?

If yes to both, the basis is 1/2 the cost of the property + 1/2 the date of death value.

[TaxGuyBill]

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@judys3 wrote:

they also had rental property that was never included on tax returns.  

She has created an LLC for the rental property in 2022.  

How do I figure the value of these properties when they haven't owned them for years

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I'm confused about the timing too.

Is it more than one rental property?

When was it/they "placed in service"?

Do they still own them?  If not, when were they sold

Was the rentals literally "never" reported on their tax returns for as long as they owned them?

Is this a Single-Member LLC that has NOT made any elections to be taxed as a corporation (it is a Disregarded Entity)?

Which year(s) tax returns are you preparing?  Was an extension filed for 2023?