LLC with multiple lines of business

[jpingree]

Hi, so I have a partnership LLC for me and my wife. Up to this point we have used this for rental income and I have selected that activity on the tax return. With the advent of eBay income causing a 1099 I wanted to report this under the LLC also as "ordinary income" and be able to combine all income/expenses/losses for the business as a whole. When I did this in Turbo Tax business and created Schedule K's for ourselves it seemed to cause issues in Turbo Tax personal because of the two "types" of income. And it suggested that I create multiple Schedule K's (for the different lines of business). Can I do this from one single business tax return? If so, how? I realize a husband-wife partnership LLC is just pass-through and as I understand it I could just combine everything on a Schedule C but I have done this for the rental income for quite a few years now and would like to continue keeping the LLC "activities" separate, including the tax return.

[AliciaP1 · Accepted solution]

Yes, if your K-1 has info in multiple of boxes 1, 2, & 3, you must enter 2 K-1s for each partner into TurboTax.  On the first K-1 enter 1 of the amounts from box 1 or 2 (in your case) and the rest of the boxes as reported in total.  Then create another K-1 for the same partner from the same partnership and enter the amount from the other box (1 or 2 in your case) only.  Then repeat the process for the other partner, so you will have 4 K-1s in the end.

You cannot file your multi-member LLC as Schedule C income, even as a husband/wife partnership, since the business is registered as a legal entity (LLC).  

Per the IRS:

LLCs owned by a husband and wife are not eligible to be "qualified joint ventures" (which can elect not be treated as partnerships) because they are state law entities.

[jpingree]

So, just to be clear, we are not "generating" multiple Schedule K's (for each partner) from the Business side Tax Return. That is just one K-1 for each partner with multiple boxes filled in. It is only on the TT Personal side that we create 2 each (even though we physically only received the one).