The property was contributed to the single-member LLC around 2002. Assume that the property is worth less today than when it was contributed to the LLC. FOR FEDERAL TAX PURPOSES, can the property be valued at cost when it is distributed to the member, or does it have to be distributed at fair market value? If it has to be distributed at fair market value, the LLC would incur a tax loss and the member would receive a property with a very low cost basis. Is there any way to make sure the member doesn't get stuck with a potential future taxable capital gain? This is NOT and will not be a primary residence.