1099-MISC

[spur07]

I am a small residential real estate rental LLC.  All of my LLC's income is derived from rental activities. However, my LLC received a 1099-MISC with an amount in box 3 as part of COVID-19 relief for small businesses. The funds were dispersed by the county in which I live and have my business. This income is not related to my rentals, for it is separate and apart from the LLC's rental activities. TurboTax Business only provides for 1099-MISC information to be reported as it relates to the LLC's rental activities. Where and how in TurboTax Business do I correctly report this 1099-MISC income separately from my LLC's rental income?

[M-MTax]

You make it sound like this LLC has only you as a member in which case you don't need TT Business. So do you have more than one member and are you filing a 1065? The usual way to report box 3 from a 1099MISC is to enter it as miscellaneous income.

[Carl]

This is why it's generally not a good idea to put a a rental property into a single member LLC since such a business is reported on SCH C as a part of your 1040 tax return. If rental property is the only thing the LLC owns, then absolutely nothing concerning the rental property is reported on SCH C. It's reported on SCH E. So you have absolutely nothing to report on SCH C concerning the rental property. It's all reported on SCH E.

Now, there are exceptions where a rental property could be classified as a SCH C business. But I doubt you come anywhere close to qualifying for the "active trade or business" exception with only one rental.  I myself have three rentals, and don't come anywhere close either.

[M-MTax]

Now, there are exceptions where a rental property could be classified as a SCH C business. But I doubt you come anywhere close to qualifying for the "active trade or business" exception with only one rental.

That's right but the exception is NOT an "active trade or business".....ALMOST ALL income from rental real estate is SCH E income with the only exception being real estate dealers who hold real estate for sale to customers in the ordinary course of business and rent out that real estate....THAT income goes on SCH C.

[spur07]

Yes, more than one member and yes, filing a 1065.

Thank you

[M-MTax]

I suppose the character of that income should be determined. If it was intended to be a replacement for rental income lost then it should be reported as rent. If it was intended to assist the actual business for its operational expenses then it would be ordinary income.....entered as miscellaneous income.