Well there are at least a couple of situations. If the taxpayers are in a community property they have a choice, to treat the LLC as a disregarded entity (Which would mean continuing to report on the Schedule E as before), or a partnership. That choice might simplify things if it is available.

A non-community state does require partnership treatment.

I believe that I have heard that if you have the Fixed Asset Manager, you may be able to do a transfer, otherwise you are probably stuck with re-entering all the assets.

This is the reverence I found.

Joint Ownership of LLC by Spouse in Community Property States

Rev. Proc. 2002-69 addressed the issue of classification for an entity that is solely owned by husband and wife as community property under laws of a state, a foreign country or possession of the United States.

If there is a qualified entity owned by a husband and wife as community property owners, and they treat the entity as a:

• Disregarded entity for federal tax purposes, the Internal Revenue Service will accept the position that the entity is disregarded for federal tax purposes.
• Partnership for federal tax purposes, the Internal Revenue Service will accept the position that the entity is partnership for federal tax purposes.

A change in the reporting position will be treated for federal tax purposes as a conversion of the entity.

A business entity is a qualified entity if;

1. The business entity is wholly owned by a husband and wife as community property under the laws of a state, a foreign country, or possession of the United States;
2. No person other than one or both spouses would be considered an owner for federal tax purposes; and
3. The business entity is not treated as a corporation under IRC §301.7701-2.