Contributions of real estate and cash to to Multi Member LLC

[Phil Doran]

I am looking for feedback on how to properly document contributions on LLC operating agreement and seeking advice any tax implications of this LLC set-up.

Partner #1: Contribution will be Real Estate with a FMV of $360K and a outstanding mortgage of $280K. The estimated tax basis of the house (not including land) would be $230K. Partner #1 has already received approval from bank holding the mortgage to deed the property to the LLC. Partner #1 lived in the home for 12 months and used it as rental property for one year.

Partner #2: Contribution of $80K cash which will equal the current equity in the property (FMV of $360K less $280K).

The operating agreement will give each member 50% ownership in the LLC and the the LLC will be responsible for paying the mortgage. We are planning on documenting the responsibility of the LLC to make the mortgage payments for the property. We will make sure to get proper insurance ASAP in the LLC name.

The goal of this business will be to use Partner #2's cash contribution to remodel the house and to rent the property to residential tenants. All profits and losses will be split 50/50.

Is there any concern with this set-up giving 50/50 ownership? I don't believe there will be any tax implications from the contributions for either member. I am looking for someone to confirm. 

Also, once this LLC is created, we will deduct depreciation using the tax basis of $230k over 26.5 years since Partner #1 has already used one year of depreciation. Is this correct?

Thank you to anyone who will reply.