Step Up in Basis at Death for LLC-owned Real Estate

[Mark S.]

How does the IRS view a step-up in basis at death on a rental property that is owned by an LLC (single member LLC in Kentucky if that matters)?

Let’s say I acquire the rentals in my personal name, transfer to my SMLLC, and die. How does that affect whether or not my heirs get a step-up in basis?

I'm assuming if I held them in my personal name, heirs would get step up in basis at my death but not if they're owned by the LLC. Is this correct?

Can someone walk through a simple example of each scenario with numbers?

[Lance Lvovsky]

@Mark S.

Generally a step up in basis would apply. Section 754 basis step up is an election for llc/partnerships. Speak to a CPA who can gather all your specific facts and advise accordingly. Best if the CPA understands estate and succession planning.