Rental Property with Income that moved to LLC midyear

[jtownsl]

My wife and I have a rental property that had income for the first few months of the year, before we transferred the property to an LLC (partnership between wife and myself). We are filing a 1065 for the LLC. The question is, where should we show the income for the property before it was transferred to the LLC?

-Can we simply assign all the property income for the year to the 1065?

-Or do we need to separate income prior to the LLC into personal taxes Schedule C, and income after the LLC in the 1065?

Thanks

[cdlvj130 · Accepted solution]

you file Schedule E for the first part of year. Rest of it for year goes on 1065. Turbo Tax Business Edition will do the LLC, but I would investigate H and R, as it is much cheaper.

[AmeliesUncle]

I'll also add a note that that the last time I checked, the Partnership program will NOT handle it correctly and give you errors for this situation.  I don't know if other software can handle it well or not.

On the other hand, in my opinion every Partnership and Corporation should go to a good tax professional for AT LEAST the first year.  There are way too many mistakes to be made for a first year (or last year) Partnership or Corporation, and despite their advertisements, do-it-yourself software is FAR inferior to a good tax professional.