Solved: Should I select "we rent real estate" if using TTB for consolidated filing of 1 multi-mem LLC that only owns 1 wholly-owned subsidiary (that owns a residential property)?
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cbp13
New Member

Should I select "we rent real estate" if using TTB for consolidated filing of 1 multi-mem LLC that only owns 1 wholly-owned subsidiary (that owns a residential property)?

First year filing, I am the Manager and 99% owner of a multi-member LLC (with my brother owning 1%) - let's call it Company A.   Company A currently only has income/loss from a wholly-owned subsidiary - Company B - which owns a residential rental property.

My understanding is that I only need to file 1 filing in the name of Company A.

As it is a consolidated filing in the name of Company A, do declare "we rent real estate to others" even though it is indirect?

Also - do I line item expenses incurred and income from Company B in TTB just as if those were incurred directly for Company A?

Thanks in advance.

 

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Accepted Solutions
AmandaR1
New Member

Should I select "we rent real estate" if using TTB for consolidated filing of 1 multi-mem LLC that only owns 1 wholly-owned subsidiary (that owns a residential property)?

Yes, you have it correct. The LLCs are for legal purposes only since they are disregarded for taxes. The top LLC name and EIN number are on the return and you report all activity under the one business return (as if it was incurred there). 

Select we rent real estate to others, even though it's indirect, because it's the nature of at least some of the activity you are reporting (if not all). You can select more than one type of business activity.

If your top LLC is providing management type services, then you could select services as well but you shouldn't include any transactions between the owned LLC.  These selections will determine the types of partnership activities for flow through income and expenses. Rental is passive and the other types are active business.

If you use more than one, you'll be prompted to enter related income and expenses for each and you'll need to enter your K-1 twice on your personal return, for your share of both activities. 

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1 Reply
AmandaR1
New Member

Should I select "we rent real estate" if using TTB for consolidated filing of 1 multi-mem LLC that only owns 1 wholly-owned subsidiary (that owns a residential property)?

Yes, you have it correct. The LLCs are for legal purposes only since they are disregarded for taxes. The top LLC name and EIN number are on the return and you report all activity under the one business return (as if it was incurred there). 

Select we rent real estate to others, even though it's indirect, because it's the nature of at least some of the activity you are reporting (if not all). You can select more than one type of business activity.

If your top LLC is providing management type services, then you could select services as well but you shouldn't include any transactions between the owned LLC.  These selections will determine the types of partnership activities for flow through income and expenses. Rental is passive and the other types are active business.

If you use more than one, you'll be prompted to enter related income and expenses for each and you'll need to enter your K-1 twice on your personal return, for your share of both activities. 

View solution in original post

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