Hi, I searched past posts but didn't find a specific answer to this question. I have done research elsewhere and got conflicting answers.
My wife and I created an LLC (as a partnership) in 2020. We live in NY, but the LLC was organized in VA. We entered into a contract to buy a vacation property at the end of 2020, but the closing is scheduled for end of Jan 2021. There is obviously no income for LLC in 2020 -- since the LLC doesn't even own the property yet. We had about $3000 expenses, including the LLC filing fee and Registered Agent fee, 2 house-hunting trips from NY to VA, and the fee we paid to the Home Inspector.
1. Do we need to file 1065 this year? I have been told by some people that since the LLC theoretically has no activity, no filing is required this year.
2. If we don't file this year, then when we file 1065 for the LLC for 2021, can we still claim the $3000 start-up expenses that was incurred in 2020?
3. I will probably hire a CPA to do the tax next year when the LLC is actually generating income and the real deductions and depreciations start, but for 2020, I find it hard to justify paying $800~1000 to a CPA to file a 1065 with a couple of lines. The actual tax benefit from deducting the $3000 start-up expense is going to be less than the CPA fee. Am I being penny-wise and pound-foolish?
4. Should I just buy the TT Business software and file 1065 myself, at least for 2020? That will keep me safely on the good side of IRS, and avoid the high fee of a CPA. I have used TT to file my 1040 for the last 10 years, so I assume TT Business should be relatively the same in terms of user-friendliness?
Thanks.
Sandpiper21
