Transfer to LLC and Capital Gains Exclusion

[Manuel Vicente]

Hi!

I've been doing some research on this topic, but I haven't really been able to find solid information.

I have a property that I lived in for two out of the last 8 years, and because I moved out of the property due to military orders, I have two more years to sell it and be able to take advantage of the capital gains tax exclusion.  I have also been depreciating it for the last 6 years that it has been a rental property.

If I create an LLC and sell the property to the LLC at fair market value (or...significantly higher, so that the LLC basis can be higher), would I be able to reset the basis in the LLC by realizing the capital gains tax on the sale? Of course, I would then exclude the cap gains tax because I'm within the window for the exclusion.

Also, would I be able to pay taxes on the recapture of the accumulated depreciation, and then restart depreciating it within the LLC? I plan to be in a low tax bracket this year, so it's a good opportunity to cash in the depreciation recapture.