@brickfoxproperty wrote:
Hi. I have some related questions. My spouse and I formed an LLC to buy, rehab, and rent property. I have a house titled in my name that I had lived in for years, that we converted to a rental property in the middle of the year. We moved to a duplex (the title is in both of our names) and we live in one half and rent out the other.
In our operating agreement we counted the value of both houses towards our initial capital contributions to the LLC, with the intent that both properties be used to generate income for the business. We live in a non-community property state, so we have to file a 1065. I am entering the information for the part of the house we live in on Schedule A, and will put the rented half of that one, and the other house on the business taxes.
My question is, do we still have to file Schedule E, since the houses are titled in our names instead of the LLC, or only the 1065 and 8825, or the 1065, the 8825, AND the Schedule E? Or do we put it on a 8825 since we are using the houses in the LLC, and then it passes through on the K-1?
Does that mean we can only record non real estate business expenses on the 1065, which we basically don't have, since all of our LLC income and expense is real estate related? Does that also mean we won't be able to take business deductions such as depreciation unless the LLC officially holds the mortgages, despite our business' main purpose being renting real estate, and us both considering the properties to be commonly held for the business, and that is recorded in the operating agreement?
Thank you so much!
I'm seeing this late and hopefully you completed your return. I don't know how could include property as assets of the LLC without re-titling them to the LLC. Your questions are good ones and I don't think any free answer from a guy on the internet is going to be much help. Your questions show exactly why forming an LLC is not a DIY project. I think you need professional tax advice.
