topic Sch. C Business Pay Rent to Single Member LLC. 1099-Misc Required? in Business & farm

Sch. C Business Pay Rent to Single Member LLC. 1099-Misc Required?

stellarun21 — Sat, 18 Jan 2025 01:13:14 GMT

I have a small schedule C business which rents the space. Previous landlord/owner of the building wanted to retire and sell the building, so I formed a single member LLC and bought out the building under LLC's name. In 2024, my schedule C business paid over $600 rent to my single member LLC.

1. Does my schedule c business need to issue a 1099-Misc to my LLC? My LLC does have a EIN.

2. I will report the LLC activity on schedule E, right? I did not make any election to be treated as S-crop.

Thanks all.

Re: Sch. C Business Pay Rent to Single Member LLC. 1099-Misc Required?

AmeliesUncle — Sat, 18 Jan 2025 02:38:23 GMT

The Schedule C is considered as "you" and the Single Member LLC is considered as "you".

For tax purposes, you don't really rent to yourself. That means (1) you don't issue a 1099 to yourself and (2) in most cases you just deduct the building expenses and depreciation on the same Schedule C as your business.

Re: Sch. C Business Pay Rent to Single Member LLC. 1099-Misc Required?

stellarun21 — Sat, 18 Jan 2025 03:27:23 GMT

The main reason that I set up the LLC is for the liability protection purpose. For legal purpose, in order to demonstrate LLC exist separately from myself, can my schedule C business still writes rent check to pay my LLC?

Re: Sch. C Business Pay Rent to Single Member LLC. 1099-Misc Required?

AmeliesUncle — Sat, 18 Jan 2025 03:31:12 GMT

Sure.

It just isn't considered for income tax purposes.