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ciquo
Level 2

LLC Mixed Assets

Hello, 

 

My wife and I started a rental property business. We bought our first income property in 2018. When purchasing our second income property at the beginning of 2019, we opened an LLC under our business name. The second home has purchased by the LLC. After some research I know I have to file a 1065 for our partnership LLC. But what I am trying to get clarity on is how to handle this mixed asset situation that we have. One property is under the LLC one is not. Do I only report against the one property in the 1065 and report the other through Schedule E, or can they be combined ?

 

thanks !

1 Best answer

Accepted Solutions
tagteam
Level 15

LLC Mixed Assets


@ciquo wrote:
Do I only report against the one property in the 1065 and report the other through Schedule E, or can they be combined ?

The properties cannot be combined at this point (for the 2019 tax year) because one was held jointly by you and your wife while the other was held by the LLC (if you reside in a community property state, there is a solution for this scenario).

 

As an aside, rental income and expenses are reported on Schedule E when filing an individual income tax return but are reported on Form 8825 when filing a return for an LLC (Form 1065).

 

Regardless, you can always transfer your first property into your LLC with your second property (or vice versa) to simplify accounting and income tax preparation going forward.

 

View solution in original post

1 Reply
tagteam
Level 15

LLC Mixed Assets


@ciquo wrote:
Do I only report against the one property in the 1065 and report the other through Schedule E, or can they be combined ?

The properties cannot be combined at this point (for the 2019 tax year) because one was held jointly by you and your wife while the other was held by the LLC (if you reside in a community property state, there is a solution for this scenario).

 

As an aside, rental income and expenses are reported on Schedule E when filing an individual income tax return but are reported on Form 8825 when filing a return for an LLC (Form 1065).

 

Regardless, you can always transfer your first property into your LLC with your second property (or vice versa) to simplify accounting and income tax preparation going forward.

 

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