Transfer Rental Property from Parent to Child - CA Prop 58

[Daniel A.]

Hello,

I am looking for some help on the following...

I own 48% of an apartment building (located in California) with my parents, who own the other 52%. They want to transfer another 35% of ownership to me. This 35% is about $1.5M in equity. I am wondering whether they can make this transfer without triggering a property tax re-assesment, so that we can keep the property taxes at the same rate using CA prop 58. Based on my research, each parent can give up to $1M without the building being reassessed. I also learned that it may be good to first put the building ownership in an LLC, for protection from potential lawsuits, and also to make the transfer of ownership easier.

I look forward to any advice on how to make this transaction as smooth and tax-free as possible...

Thank you!

Daniel