Background: My wife and I own a Short Term Rental Property that is held in a partnership LLC where we provide substantial hotel-like services (e.g., daily cleaning, in-room coffee, fresh linens and towels, pool, etc.). The LLC is registered in Delaware and we file a Federal Business Tax return annually. We each receive a K-1 with a net rental real estate LOSS. We are not real estate professionals. However, we satisfy the requirements for STR Tax Loophole (e.g., guest stays on average less than 7 days, we materially participate, etc.) for non-passive income.
Questions:
1) Do we file Schedule C or E? When I try to file under Schedule C, TT asks us similar questions as the Business Tax Return which I already filed. If I file it under Schedule E, TT classifies it as a passive loss and outputs a zero instead of a loss.
2) Should we dissolve LLC to make future filings easier?
Thank you!
Reference: https://ttlc.intuit.com/turbotax-support/en-us/help-article/form-1040/report-rental-schedule-e-sched...
