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Tax Planning/Step-basis for LLC member

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Question
Hello Owen,

I hope this e-mail finds you well.  Parent owns 100% of a single member LLC holding rental property.  Once the parent passes away, will his son inherit the property at the step-up basis?  My feeling is yes he will, but I can't seem to confirm it or find anything that specifically refers to this situation.  If I am in fact correct, can you also reference where I can see this information to keep on file?

Thank you in advance and best regards,

Jeff

Answer
Jeff - You will get the stepped up basis.  The LLC in this case would be considered a disregarded entity.

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Limited-Liability

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Single-Member-Lim

I hope this helps.  

Tax Planning

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OWEN S. ARNOFF, EA

Expertise

As an Enrolled Agent, I am fully capable of providing tax advice as it relates to personal and business income taxes. Enrolled Agents are the only Federally licensed tax practitioners and are admitted to practice before all administrative functions of the IRS. My specialty is working with small business owners who file Schedule "C" and helping them to structure their business in such a way as to maximize as many tax advantages as possible. I also enjoy working with individuals who have both routine as well as complex tax situations. I prefer to concentrate on individuals and small business tax planning.

Experience

I have a 25 year background in financial services including tax, bookkeeping, insurance, real estate and securities. I was previously the Chief Financial Officer of a local and national franchise organization. I am currently semi-retired, but used to own (in partnership with another EA) an individual and small business financial engineering firm where I work with nearly 2,500 individuals and small business owners in nearly every state and almost every continent, assisting them in all aspects of their tax and financial well-being. I have prepared or reviewed more than 8,000 tax returns in my career.

Organizations
National Association of Tax Professionals

Publications
http://www.amazon.com/Owen-Arnoff/e/B00BLRIZNU/ref=ntt_dp_epwbk_2

Education/Credentials
Enrolled Agent, Admitted to Practice Before the IRS, Accredited Tax Preparer, Fellow of National Tax Practice Institute, Certified QuickBooks ProAdvisor (1999-2011), Sleeter Group Certified QuickBooks Consultant, Life & Disability Insurance Agent License (California, Texas, Maine), Real Estate Agent License (California); Many years of continuing education in all these fields.

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