How to report rental property that belong to the Single Member LLC

[nzamaray]

Hello,

I purchased several rental properties for my Single-member LLC. I am using Home and Business TurboTax. The Business Profile does not have Rentals. How do I report my rentals?

If I enter them in the Rental section of TurboTax, I do not see any income/loss in the LLC/Business section.

Please advise.

Thank you

[GeorgeM777]

Because you are a single-member LLC, for tax purposes the IRS treats your tax situation the same way it would treat a sole proprietor.  That is, your rental income and expenses get reported on form Schedule C, Profit or Loss from Business.  Therefore, you should not see any reported income in the LLC section of TurboTax.  

If you elected to have your LLC taxed as an S-Corp or C-Corp, then you would see income on the forms for the S-Corp or C-Corp.   Select Forms mode (upper left side of your screen) and in the list of forms generated for your return, see if you have a Schedule C.  Click on Schedule C to review the income you have entered.  

@nzamaray

[AmeliesUncle]

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@GeorgeM777 wrote:

 That is, your rental income and expenses get reported on form Schedule C, Profit or Loss from Business.

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No, it would go on Schedule E (unless "services" were provided to the tenants, such as maid service or meals).

@nzamaray  Report it in the Rental section.  It should not show up in the business section.

[nzamaray]

@AmeliesUncle , @GeorgeM777 , thank you for the replay. It looks like it should be on Schedule E. I just wanted to confirm. Appreciate your help

[GeorgeM777]

We need to modify our prior response.  Your rental income and expenses get reported on Schedule E Supplemental Income and Loss.  There are situations where your rental income would be reported on Schedule C Profit or Loss From Business, such as, if you meet the definition of a real estate professional.   According to the IRS, a real estate professional must satisfy both of the following requirements:

• More than half of the personal services you perform in all trades or businesses during the tax year are performed in real property trades or businesses in which you materially participate.
• You perform more than 750 hours of services during the tax year in real property trades or businesses in which you materially participate.

Thus, unless you meet the definition of a real estate professional, report your rental income and expenses on Schedule E Supplemental Income and Loss.  

@nzamaray

[Edited 1-25-23 | 7:36am PST]

[nzamaray]

Hello @GeorgeM777,

I am a real estate professional. How do I use TurboTaxes to report it properly?

Thank you

[GeorgeM777]

To report your rental income as a real estate professional, follow these steps:

1. Select the Federal Taxes tab.
2. Select Wages & Income.
3. Scroll down the screen to the section Rental Properties and Royalties and click Start or Update.
4. Respond to the questions.  
5. On the screen Please Confirm Your Professional Status you will have the option to select the responses that apply to your situation.  To claim real estate professional status you will need to check both boxes that contain information about the time you spent in real estate activities.
6. The next screen will contain information about the rental expenses you can deduct based on the level of your participation in rental activities.
7. Continue through the section entering information about your rental activities and rental properties.  
8. As you respond to questions, Schedule C Profit or Loss From Business will be generated.  

@nzamaray