I bought a house in 2017 that I intend to rent but I am still making improvements and won't make it available to rent until May 2018. This will be my first rental property. I created a single entity LLC for the rent and expenses associated with the property. Since I didn't make it available for rent in 2017, how do I account for the money I put in to it in improvements and expenses in 2017? Turbo Tax tells me Schedule E needs rental income in 2017 in order for me to enter my expenses. Secondly, I have a 1099-INT for $500 on my LLC checking account from a promo I got at the bank. Where do I enter this income?
You would add it to the basis any improvements to the basis. You can't take expenses until the property is placed in service. The interest is entered as below.
Form 1099-INT reports interest from banks, brokerages, and other financial institutions. Here's how to enter a 1099-INT:
Placed in Service
You place property in service in a rental activity when it is ready and available for a specific use in that activity. Even if you aren’t using the property, it is in service when it is ready and available for its specific use.
Example.
On April 6, you purchased a house to use as residential rental property. You made extensive repairs to the house and had it ready for rent on July 5. You began to advertise the house for rent in July and actually rented it beginning September 1. The house is considered placed in service in July when it was ready and available for rent. You can begin to depreciate the house in July.
You would add it to the basis any improvements to the basis. You can't take expenses until the property is placed in service. The interest is entered as below.
Form 1099-INT reports interest from banks, brokerages, and other financial institutions. Here's how to enter a 1099-INT:
Placed in Service
You place property in service in a rental activity when it is ready and available for a specific use in that activity. Even if you aren’t using the property, it is in service when it is ready and available for its specific use.
Example.
On April 6, you purchased a house to use as residential rental property. You made extensive repairs to the house and had it ready for rent on July 5. You began to advertise the house for rent in July and actually rented it beginning September 1. The house is considered placed in service in July when it was ready and available for rent. You can begin to depreciate the house in July.
Can I offset my single entity LLC checking 1099-INT against any business expenses? Or does it go under my personal income?