Selling/activating depreciation of LLC to new investors

[Quentin McNew]

***Selling depreciation of LLC to new investors buying "equity/shares"***

Feedback or insights from syndicators with experience or tax professionals on depreciation preferred :)

I own 100% of some LLCs and have a couple LLCs with over $300,000 depreciation (over $2,000,000 total depreciation) that I’m not going to need from my losses. I know it’s easier to set up on front end during acquisition with “GP and LP” structure with “A shares” and “B shares”, but trying to liquidate/activate depreciation to investors buying equity from my LLCs.

Why? I have great 1st lien positions in place locked in an environment where “fixed debt” on properties that cash flow is the ASSET, instead of the properties now that interest rates are high and lending has cut back!!

I plan to hold these properties FOREVER or at least 10+ years (because rehabbed and have management/operations all in place), so trying to reimburse my cash from rehabs, new roofs, etc and recapitalize the value for CASH injection…..instead of selling.

Is it possible for investors to buy into my LLC with cash and I give them my depreciation? Or has anyone had experience doing this? I've had 3 syndicator friends tell me they've done this and all have been a little different answers structure depending on their CPA, but basically had changed verbiage in "operating agreement" or "PPM" to show allocations and percentages (interest/debt preferred return, equity, and depreciation) pro-rats out.

Thanks in advance if anyone is out there :)

Go Illini!