Two rental properties we own for a couple years were listed correctly on our 1040 schedule E. This year we contributed them as member capital to a newly formed LLC partnership.
CPA advice: cannot just delete the properties from our 1040 schedule E. Instead, have to explain to IRS what happened. To do that, the CPA advises leaving them on schedule E, clear all income, expenses and depreciation lines, but add notes to each property description, something like "Property contributed to partnership EIN xx-yyyyyy". IRS will have that partnership's 1065, and will see the properties' info continuing there.
The properties are listed / identified on schedule E part I, line 1a. Only physical addresses show up there.
Technical problem: no matter what I tried, Turbotax does not let me append a note to a physical address on that line. It insists on only legit physical addresses. Options:
1) Forget electronic filing. Leave schedule E as Turbotax creates it. Manually add the recommended notes on the printed schedule E page. File by mail.
2) Leave schedule E as Turbotax creates it. Add a separate statement explaining the situation.
Question here: how do I add an explanatory statement to schedule E in Turbotax (similar to the statement I can add to form 2210) ? Or do I have to just add a separate printed page and file by mail ?
3) Is there a better way to implement the CPA recommendation in Turbotax?
4) Is there a better or simpler way to deal with this case?
