A business partner and I formed an LLC (50/50 members) this year and purchased a property that we intended to hold as a long-term investment and use as a rental property. Long story short, we had to flip the property due to a later discovered ordinance in the municipality limiting rental properties on a given block. After fixing the property up and selling it on the market, we suffered a decent loss on the overall transaction.
Despite forming the LLC, the totality of the transaction was managed by my partner and I as individuals. We got a commercial loan with both of our names on it to finance the purchase and rehab, and otherwise paid for things out of our own pockets (all while staying 50/50). What is the best way for us to recognize this loss as well as deduct our eligible expenses we accumulated?
Thanks!
