MULTI MEMBER LLC WITH SINGLE MEMBER SUBSIDIARY

[missmeg]

HOW DO I FILL OUT A 1065 FOR A MULTI-MEMBER LLC WHICH IS A HOLDING COMPANY  TAXED AS PARTNERSHIP WHICH OWNS A SUBSIDARY ANOTHER LLC (SINGLE-MEMBER) THAT HAS RENTAL INCOME. JUST NOT SURE WHER TO PUT THE RENTAL INCOME FROM THE SUBSIDARY.

1) SHOULD I FILL OUT FORM 8825 ON 1065?

2) SINCE THE RENTAL INCOME WAS PAID TO THE SUBSIDIARY, HOW DO I SHOW WHICH COMPANY THE INCOME IS FROM ON THE 1065? 

[Mike9241]

the single-member LLC is ignored. so neither rental income of the SMLLC nor the rental expense of the parent parnership is reported. the rest of the SMLLC activity is reported on the 1065 as if there was just a single company.  more complicated would be if the SMLLC receives rental income from other sources.

[missmeg]

Yes, the SMLLC received rental income from in the amount of $20,000 for a property it doesn't own. It just collected rent because it's a subsidiary of a rental holding company. Neither of which owned the property if collected rent for.  

BACKGROUND

HOW DO I FILL OUT A 1065 FOR A MULTI-MEMBER LLC WHICH IS A HOLDINGCOMPANY TAXED AS PARTNERSHIP WHICH OWNS A SUBSIDARY ANOTHER LLC (SINGLE-MEMBER) THAT HAS RENTAL INCOME OF $20,000?  JUST NOT SURE WHER TO PUTTHE RENTAL INCOME FROM THE SUBSIDARY.

1) SHOULD I FILL OUT FORM 8825 ON 1065?
2) SINCE THE RENTAL INCOME WAS PAID TO THE SUBSIDIARY, HOW DO I SHOW WHICH COMPANY THE INCOME IS FROM ON THE 1065?  THE 1065 IS UNDER THE HOLDING COMPANY SINCE IT'S MULTI-MEMBER (2MEMBERS).

3) I RECEIVED A 1099-K FOR RENTAL INCOME UNDER THE SUBSIDARY'S NAME FROM JAN - MAY OF 2024.
4) THE REST OF THE RENTAL INCOM JUNE - DECEMBER 2024 WAS PAID UNDER MY PERSONAL NAME. 

 THE SMLLC DOES NOT OWN THE RENTAL PROPERTY HOWEVER, A PART OFTHE RENTAL PAYMENT (January - May) WAS MADE TO THE SMLLC (the subsidiary) AND A PART WAS MADE UNDER THE OWNERS NAME (June -December) SO NOW I'M NOT SURE IF I NEED A SCHEDULE E FOR THE PAYMENTUNDER THE OWNER'S NAME.  ALSO, CAN I TECHNICALLY PUT THE RENTALINCOME PAID TO THE SUBSIDIARY FOR (January - December) ON THE 1065 WHEN NEITHER THE SUBSIDIARY NOR THE HOLDING COMPANY LEGALLY OWNS THE RENTAL PROPERTY.

[DavidD66]

I would not file a form 8825 for the MMLLC.  It doesn't own a rental property, so it should report rental income and expenses.  I would record all rent paid to the SMLLC and the MMLLC on the MMLLC's Form 1065 as income.  I am guesing tha you are the owner of the rental.  The MMLLC should issue you a Form 1099-MISC for whatever rental income they collected.  This will be a wash on the 1065 as they will record income and expenses for the same amount - the amount of rent collected.  

It would be easier to determine what you should do to report all of this with the following information:

• Who owns the rental property?
• Who owns the MMLLC
• What did the SMLLC &/or MMLLC  do with the rental income collected

[missmeg]

1)  I own the rental property 

2)  My husband and I are the owners of the MMLLC (50/50)

3)  The SMLL (which is a subsidiary of the MMLLC) collected the rent on our behalf and we paid mortgage and pocket the rest.

NOTE:   My biggest concern was how to report on the 1065 that the SMLLC (the subsidiary) collected rent, so I wouldn't have the 1099-MISC in the amount of $20,000 (that was issued to SMLLC) just floating around. I think it's the best idea to show it as a wash on the 1065 as regular income and expense since neither of them owns the property. 

QUESTION:    Should I RECORD it as a 1099-MISC payments in the expense section of the 1065?

[RobertB4444]

You can record it as if you received a 1099-MISC.  That would put it in the proper place.

@missmeg