Can an LLC file a schedule E in turbo tax? How do I include rental income and depreciation under an LLC?

[streampaw]

Not really sure how to include all this in turbo tax. 

So here goes the story: 

I currently have a self-employment business (my main source of income), let's call it LLC1. I am the sole owner. 

I created another LLC just to buy an office building. Let's call it LLC2. I am also the sole owner here.  

LLC2 got a mortgage for the office building in 2022. 

LLC1 paid LLC2 "rent" in the amount of $20000 in 2022. 

LLC2 paid a mortgage in the amount of $20000 in 2022. Equals out to zero.  However, we can't deduct all the mortgage here (just the mortgage insurance+taxes, not the principal), so I guess it's not truly zero. 

And also, I assume LLC2 can deduct the depreciation for the building, which will reduce the income here.

How do I report all this in turbo tax? Does LLC2 need to file a schedule E? 

I do have other rentals on my schedule E as well, is this where I include this new office building? Or will turbotax assume it's in my personal name if I do it this way? 

[Cynthiad66]

In most cases, a single-member domestic LLC is not treated as a separate entity for federal income tax purposes. If you are the sole member of a domestic LLC, file Schedule E (or Schedule C or F, if applicable). However, you can elect to treat a domestic LLC as a corporation.

If you earn rental income on a home or building you own, receive royalties or have income reported on a Schedule K-1 from a partnership or S corporation, then you must prepare a Schedule E with your tax return.

Mortgage payments are not deductible as an expense, depreciate the building. Also, include the $20,000 from LLC1 to LLC2 as rental income on LLC2 or Schedule E.

The IRS disregards the single member LLC entity as being separate and distinct from the owner. Essentially, this means that the LLC typically files the business tax information with your personal tax returns on Schedule C and Schedule E form 1040. The profit or loss from your businesses is included with the other income your report on Form 1040.

Simply, since you are sole owner of all LLCs you can just file a form 1040 with the Schedule C business and Schedule E with the rentals.

LLC Filing Tax Rules

[natharaga]

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[streampaw]

So in that case, on the schedule E it just has my personal name for all my rentals. Is this okay? Even though that one rental (the office building) is owned by LLC2. 

And I would assume that LLC2 doesn't need to file a schedule C, since the only income was the rent from LLC1 which is reported on schedule E? 

[MaryK4]

Yes as long as it is a single-member LLC the IRS will treat it is as a disregarded entity or the same as you.  You would just add as an additional rental, just be mindful of the self-rental question in the TurboTax interview.  This is not a problem as you will have to report the income so it must be fair market rental fees, but you do want to include the information. @streampaw