How Do I File Taxes for a Rental Property Owned with Friends, Without an LLC?

[StrangerAtXRoads]

Hi,

My two friends and I jointly purchased a rental property. All three of us are listed on the property deed; however, we did not form an LLC. The situation is a bit confusing:

• Only two of us are listed on the mortgage, even though all three of us applied together.

• The 1099-MISC we received for rental income is addressed to only one of us—the one not on the mortgage.

We're unsure how to properly file this information for tax purposes.
Do we need to apply for a partnership EIN and file a Form 1065 with accompanying Schedule K-1s?

Also, is there a way to simplify or streamline this arrangement for future tax years?

Thanks in advance for your guidance.

[Mike9241]

don't need an LLC for a multi-owner business. For rental real estate that has not elected to be taxed as an S or  C-Corp (bad idea for rental real estate) a partnership return should have been file on or before 3/15/2025. the partnership issues each partner a K-1 so they can report their share of the activity,

if this sounds too complicated see a tax pro or use Turbotax live to prepare the form 

if you want to do it yourself, you need Turbotax business. This is separate from Turbotax for 1040s

for 1065 live prep

https://turbotax.intuit.com/lp/ppc/4940/?_gl=1*1vmtcsl*_up*MQ..&gclid=6694951402341b9dd38bf2a93ad00b... 

do it yourself 1065

https://turbotax.intuit.com/small-business-taxes/cd-download/ 

[Vanessa A]

For last year, it is too late to file for a partnership  You can do this without one, however, you have the issue of one person not being on the deed.  For that person, they may want to seek professional help. 

Basically, the person who received the 1099-Misc, can issue you and the other person a 1099. 

Each of you will report your share of the expenses, such as the mortgage interest, taxes, etc.  The one that's name is not on the deed could enter the income as a miscellaneous expense as payment of share of interest for mortgage instead of as mortgage interest. 

[StrangerAtXRoads]

For clarity, all three of us are on the deed. Only 2 are on mortgage and only 1 is on 1099-MISC.

[Vanessa A]

If all three of you are on the deed, then all three of you can file the same way.  Each report your share of expenses and income.  

The person receiving the 1099-Misc will need to issue a 1099-misc to the other 2.