Solved: Multi member llc
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 stimulus info here.
cancel
Showing results for 
Search instead for 
Did you mean: 
Broncobear
Level 2

Multi member llc

My wife and I have a small llc which holds title to rental property.  We are 50/50 owners, if we use the Business Program for tax submission, will we be required to also submit personal taxes on the personal/business form?  And does that mean filing twice?  We always file jointly and she receives a w2 and I am self employed.

thanks

1 Best answer

Accepted Solutions
tagteam
Level 15

Multi member llc


@Broncobear wrote:

My wife and I have a small llc which holds title to rental property.  We are 50/50 owners, if we use the Business Program for tax submission, will we be required to also submit personal taxes on the personal/business form?  And does that mean filing twice? 


If you are using TurboTax Business to file a Form 1065 for your LLC, then you also need a different TurboTax product (such as TurboTax Home & Business) to prepare and file your individual income tax return (Form 1040); TurboTax Business can only be used to prepare an income tax return for an entity, not an individual.

 

TurboTax Business, in the process of preparing a 1065 for your LLC, will also generate a K-1 for you and your wife which you will enter into your personal income tax return.

View solution in original post

8 Replies
tagteam
Level 15

Multi member llc


@Broncobear wrote:

My wife and I have a small llc which holds title to rental property.  We are 50/50 owners, if we use the Business Program for tax submission, will we be required to also submit personal taxes on the personal/business form?  And does that mean filing twice? 


If you are using TurboTax Business to file a Form 1065 for your LLC, then you also need a different TurboTax product (such as TurboTax Home & Business) to prepare and file your individual income tax return (Form 1040); TurboTax Business can only be used to prepare an income tax return for an entity, not an individual.

 

TurboTax Business, in the process of preparing a 1065 for your LLC, will also generate a K-1 for you and your wife which you will enter into your personal income tax return.

View solution in original post

Opus 17
Level 15

Multi member llc

If you live in a community property state, and the only two members of the LLC are spouses, then you have the option of filing two schedule Cs on your personal return, each listing half the income and expenses.  Then you would include the W-2, and a second schedule C for your other self-employment, and everything else that normally goes on your personal tax return.

https://www.irs.gov/businesses/small-businesses-self-employed/single-member-limited-liability-compan...

 

If you do not live in a community property state you must file form 1065 for the LLC, and you may choose to file form 1065 even if you live in a community property state.  The partnership return form 1065 requires a different program, Turbotax Business, which is only available as a CD or download for PC, it is not online or for the Mac.  As part of filing the 1065, each partner will be issued a K-1 form.  The K-1s go on your personal tax returns along with your other schedule C small business, any W-2s, and other income, deductions and dependents.

 

Be aware, the deadline for filing form 1065 is March 15, not April 15, and the penalty for late filing is $195 per month per member.  If you needed to file a 1065 for 2019, the deadline was not extended for COVID, although you can apply for an administrative waiver of the penalty if this is your first time owing a penalty. 

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
Critter-3
Level 15

Multi member llc

Wouldn't the LLC be a disregarded entity and be reported on a Sch E  and not a Sch C ?   I think you need to review the paperwork you filed to get the LLC's EIN ... what did you indicate with the IRS ? 

Opus 17
Level 15

Multi member llc

If not in a community property state, then it is clearly not a disregarded entity and files a 1065.  

If in a community property state, the spouses have the option of treating it as a disregarded entity.  I confess that I do not know in this case, whether that would mean 2 schedule C‘s or 2 schedule E’s.  

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
tagteam
Level 15

Multi member llc


@Opus 17 wrote:

If in a community property state, the spouses have the option of treating it as a disregarded entity.  I confess that I do not know in this case, whether that would mean 2 schedule C‘s or 2 schedule E’s.  


Based upon the qualified joint venture (QJV) election, it would be two Schedules E (unless the taxpayers were real estate dealers or provided substantial services to their renters). 

 

Spouses with a rental real estate business not otherwise subject to self-employment tax must check the QJV box on Line 2 of Schedule E.

 

https://www.irs.gov/businesses/small-businesses-self-employed/election-for-married-couples-unincorpo...

 

NOTE: The QJV election cannot be made if the property is held in an LLC.

Anonymous
Not applicable

Multi member llc

this comes from Rev Proc 2002-69

SECTION 3. SCOPE
.01 In General. This revenue procedure provides guidance on the classification for federal tax
purposes of a qualified entity (described in section 3.02 of this revenue procedure).
.02 Qualified Entity. A business entity is a qualified entity if:

(1) The business entity is wholly owned by a husband and wife as community
property under the laws of a state, a foreign country, or a possession of the United
States;
(2) No person other than one or both spouses would be considered an owner for
federal tax purposes; and
(3) The business entity is not treated as a corporation under § 301.7701-2.

 

 

I would therefore conclude that if they live in a CPS a partnership return is not required.   however, they must split everything so there are two schedule E's 

 

in a NON-CPS a partnership return is required because the property is held by an LLC. 

tagteam
Level 15

Multi member llc


@Anonymous wrote:

I would therefore conclude that if they live in a CPS a partnership return is not required.   however, they must split everything so there are two schedule E's 

 

in a NON-CPS a partnership return is required because the property is held by an LLC. 


I agree, but it appears as if @Broncobear is already using the Business program (presumably to file a 1065) and there is no indication that he and his wife reside in a CPS. 

Broncobear
Level 2

Multi member llc

Thanks for all the replies. Very good information all around.  The LLC is established in Arkansas which is not a CPS.  So a 1065 will be filed by March 15th. 

Dynamic AdsDynamic Ads
v
Privacy Settings