Carl
Level 15

Investors & landlords

Not sure about your "disregarded entity" comment?

A single member LLC reported on SCH C as a physical part of your personal 1040 tax return and a multi-member LLC reported on IRS Form 1065-Partnership Return, is considered by the IRS to be a disregarded entity. That means that as far as the IRS is concerned, income earned by the business is no different that W-2 income earned by you personally. It's all "personal income" weather it's passive rental income, or non-passive earned income. In your case, the rental income is passive rental income.

Non-Passive Income - This is income paid to you when you go out an "do something" (usually on a recurring basis) to actually "earn" it. Non-passive income is sometimes referred to as earned income.

Passive income - Using rental income as an example of passive income,  Rental income is income you are paid, but you don't go out and "do" anything on a recurring basis to actually earn it. All you do is "sit there" and collect it.

So there are two dates that I enter, the date that the business started and the date that the LLC started.

If i recall correctly, that's not true for a multi-member LLC. You'll be asked the business start date only, and that's it. That date has to be on or before the first rental asset was placed in service. It doesn't matter if that date was years ago either.