I own a part of a rental property as a tenant in common (TIC) that I got through a 1031 exchange (second property since the original 1031 was done in 2006). I have everything in Turbo Tax and have filed a Schedule E for the last two years (used a CPA before then). I received a note from the property manager saying "We are rolling several TIC members for our properties into the Limited Partnership this year which will enable you to receive a year end K-1 rather than having to track your tax filings separately." They have my depreciation schedule from last year. Will this create issues for me when I file my 2019 taxes? Will I have to reenter a lot of data from past years, or do anything to change how my Turbo tax account deals with it given it "knows" the property through Schedule E filings? It's my only investment property, it is owned by my revocable living trust, and I do not actively manage it.
Any help would be appreciated as I don't want to agree to something now and have it bite me from a paperwork or record-keeping perspective come April... Thanks.
i wouldn't go along with that. you'll have to keep track of your outside and inside the LP basis.
It will bite you. Don't go along with it. Been there. Done that. Got the T-Shirt. It's a T-shirt you don't want.
Sounds like you were already in a partnership so the management company is now going to complete a partnership return that should have been done in the first place. If that is true then you will stop filing the separate Sch E and only report the K1 ... I highly recommend you seek local professional guidance to review your situation.
Thanks - I'm not actually in the partnership - the manager formed a Limited Partnership for all the investors except those of us who came in via 1031 exchanges. Those of us who came in as 1031 exchanges were each considered a TIC and get different paperwork than all those in the Limited Partnership.
Thank you - my gut is that they want it to be easier for them, but there must have been a reason those of us who came in as 1031 / TIC originally couldn't be treated the same so I don't get why we are being pressured to change now. I sense it's better/easier for them but not necessarily for me.