Should I "sell" my primary residence (soon to be rental) to LLC?

[Ames Kay]

I just discovered his site, and what a helpful site it is!

I've seen similar questions answered, but I've got a little twist to my story, so I hope someone could help provide some insight.

My parents have been living in their primary residence for 10 years, but will be moving out of country and turning it into a rental for the next 2 years. What will happen after (continue renting it out, move back in, or sell?) is anyone's guess. This home has appreciated more than $500,000 in since it was purchased, so there is no more exclusion advantage to be had by keeping it in their name (which I think makes my case a little different than the other similar questions on here).

The mortgage bank will not activate the due-on-sale clause, as long as the rental agreement shows rental amount that is greater than the monthly mortgage payment... so we're good on this point.

So, is there a downside of now "selling" it to their LLC?

Thanks for your help!