LLC and Taxes

[gdub7]

If a multi-person LLC owns property, how do you report taxes paid by the LLC on your personal tax return?

[Jackstar221]

Hi,

When a multi-member LLC owns property, the LLC does not pay taxes directly. The LLC files an informational return, likely a 1065 for a partnership.

Each member then receives a K-1 from the 1065, which indicates their share of income, deductions, and credits.

When you enter the K-1 into your personal return in TurboTax, the schedule E on your personal 1040 will populate. The schedule E on the personal 1040 reports income or loss from partnerships, S corporations, rental properties, etc.

If you need to prepare a 1065 for a multi-member LLC, you will need to download our TurboTax Business product, please keep in mind that a windows 10 or above computer will be required to download TurboTax Business, it will not work on a MAC computer: Here is a TurboTax link regarding TurboTax Business:

Can I file a multi member LLC with TurboTax? 

[gdub7]

So the K-1 would break down the division of property taxes for each LLC member?

[icalvo]

I am assuming that property taxes is an expense of the entity and it will be used in the 1065 Partnership return to reduce any of the income it earned.  The K1 reports the all of the income, losses and/or gains passed to each partner based on their interest in the entity.   

[Jackstar221]

No, the property taxes will not be broken down on the K-1 for each member, but the property taxes will result in less rental income being reported on the K-1 for each member.

[gdub7]

Can the Business Privilege Tax (BPT) be deducted or does it count as state taxes paid?

For the state taxes already paid, is that divided evenly among the LLC members?

[Jackstar221]

The Business Privilege Tax is generally deductible as a business expense. However, it can vary depending on the jurisdiction and the structure of the tax.

State taxes paid by a business are typically apportioned among the members based on ownership percentage or agreed distribution method in the partnership or operating agreement. I suggest referring to the operating agreement.