LLCs and possibly losing step up basis

[Becca F.]

I know this is the millionth post about LLCs. I've talked to two investors in California and they said if a property is in an LLC, your heirs (my kids) would lose the step up basis. For example: if I bought a house in California for $500,000 and at the time of my death it's worth $1.5 million. Kids decide they don't want to continue renting it out and sell it and current market value is $3 million. I could also use lesser amounts on my Midwest properties, same concept, purchase price $120,000 and it's worth $300,000 at the time of my death. Kids want to sell it in the future and it's worth $500,000.

The step up basis is they subtract the sale price of $3 million and $1.5 million so proceeds are $1.5 million and they pay capital gains tax on that amount. My layperson knowledge of this is if they lose the step up basis it's $3 million minus my original purchase price of $500,000 so now they pay capital gains tax on $2.5 million. 

If I had my properties in a Wyoming LLC for anonymity and the property can't be traced back to me as the parent, aren't my kids inheriting this property through a business, the LLC (losing the parent-child transfer)?