Last year we formed a real estate LLC
Exactly who is "we"? It matters. If "we" is you and your spouse and you are filing a joint return, then residential rental real estate is reported on SCH E as a part of your personal 1040 joint return *no* *matter* *what*. Not one single penny of rental income or rental expenses is reported on the SCH C.
If "we" really formed a multi-member LLC, registered it as such with the state, and the LLC is the named owner of the property on the deed, then that multi-member LLC files it's own psychically separate IRS Form 1065 Partnership return. Rental income/expenses gets reported on IRS Form 8825 as a part of the 1065 Partnership return. Then the partnership will issue each individual owner/partner their own 1065 K-1 which each partner will need for their personal tax return. Information entered from the K-1 pertaining to the rental property will then end up on page 2 of the personal 1040 SCH E.
Under no circumstances and with no exceptions is long term residential rental real estate reported on SCH C.
Now you will hear people talk about it qualifying as a SCH C business if your provide your tenants recurring services on a steady basis. I seriously doubt you do that. If you claim to, then you can expect in time the IRS will ask you to prove it, with only one rental unit. Those recurring services must be "directly beneficial to the tenant". (keep the yard kept up is not directly beneficial to the tenant. You're gonna cut the grass weather there's a tenant in it or not.)
Recurring services that are directly beneficial to the tenant means things like daily or weekly housekeeping services that you provide or pay a third party to provide "on a recurring basis" and that cost is included in the rent you charge, as well as specified in the rental contract or lease agreement.
