2 person LLC partnership for rental property. Do we need to file a M-3?
Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
Announcements
TurboTax has you covered during Covid. Get the latest second stimulus info here.
cancel
Showing results for 
Search instead for 
Did you mean: 
New Member

2 person LLC partnership for rental property. Do we need to file a M-3?

My wife and I started a partnership LLC in 2017 for a rental property we purchased.  I'm confused if I need to file a Schedule M-3.  According to the IRS, below are who need to file Schedule M-3.  We clearly do not fall into 1, 2, or 3.  It's just a single property we own in the LLC and we rent it out.  However, number 4 below if confusing.  My wife and I each own 50% of the LLC partnership.  So, do we fall into number 4 below?  Or, is this referring to a business entity owning 50% or more?

Any entity that files Form 1065 or Form 1065-B must file Schedule M-3 (Form 1065), if any of the following is true:

  1. The amount of total assets at the end of the tax year reported on Schedule L, line 14, column (d), is equal to $10 million or more.

  2. The amount of adjusted total assets for the tax year is equal to $10 million or more. See Total Assets and Adjusted Total Assetsbelow.

  3. The amount of total receipts for the tax year is equal to $35 million or more. Total receipts is defined in the instructions for Codes for Principal Business Activity and Principal Product or Service in the Instructions for Form 1065 or Instructions for Form 1065-B.

  4. An entity that is a reportable entity partner with respect to the partnership (as defined under these instructions) owns or is deemed to own, directly or indirectly, an interest of 50% or more in the partnership's capital, profit, or loss on any day during the tax year of the partnership.

1 Reply
Level 3

2 person LLC partnership for rental property. Do we need to file a M-3?

It means if another entity (like a partnership, corporation, or fiduciary) owns any part of it for any part of the year.

In your particular case, that is not true. 

Dynamic Ads
v
Privacy Settings