Step up value for inheritance question

[Mike S.]

I am a little bit confused about step up basis.

It is my understanding that when you die, your property transfers to your heirs with a step up value to the current market value, so if they sell the property for that same new market value, there is no capital gain.

What is happening, if they are keeping the property? Do they start depreciation from year 1 with this new value, like if they just bought it for that new value?

Now if the property was held into an LLC. If instead of transfering the property, it is the LLC that is inherited. In the book of the LLC, does the purchase value of the property stay the same with the same depreciation as before? Is it the contribution from the new owner that is recorded with a step up value?

Would it not then be more advantageous to transfer the property out of the LLC to the estate at the time of death, then transfer the property to the heirs directly? Or I am missing something?