Understand. So the WY LLC can report that it received rent (after all operating expenses) from the TX LLC via a 1099-Misc and on the WY LLC 1065 deducts the depreciation and property taxes (assuming WY LLC is paying the property taxes). WY LLC will get an end of year statement from the property manager stating/showing the gross income and expenses that resulted in the net rent received.
The TX LLC is reporting gross rents received and deducting all operating expenses including rent paid out to the WY LLC.
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