Thank you, this was very informative. I still need some clarification and I will provide more insight as well:
- The "rental" is just a room located next to my garage that we operate the LLC out of. I do not anticipate any losses related to the rental activity between myself and the LLC. We decided to have the LLC (owned by myself and my husband) pay rent for use of this space because it seemed reasonable that this room would be rented had it been used by any other business and also provided us the opportunity to get some cash out of the LLC.
- So we should have issued ourselves a 1099 for the rental income? What are the penalties for not issuing by 1/31?
- Is there any benefit to paying ourselves rent? How else can we go about releasing money from the LLC to us as individuals? Is a monthly distribution from the LLC to myself an option - this would avoid having to complete the 1099, but are there any other other implications associated with this?
Thanks so much for the guidance!
