topic Schedule E to LLC in Investors & landlords

Schedule E to LLC

mlw424 — Sun, 16 Feb 2025 01:28:55 GMT

I reside in Texas and now operate a single member LLC (married) for my Texas real estate license. I’m an active real estate investor for my properties in California and colorado, and wondering if I should transfer those properties to my LLC as a way of documenting all the properties I’m active in as a single entity for my 750 logged hours. Does that matter? Or make sense?

Re: Schedule E to LLC

KrisD15 — Sun, 16 Feb 2025 01:31:01 GMT

To clarify, What tax entity is the LLC?

(S-Corp., Sole Proprietorship schedule C ?)

Re: Schedule E to LLC

mlw424 — Sun, 16 Feb 2025 12:18:06 GMT

Sole Proprietorship/single member

Re: Schedule E to LLC

DianeW777 — Mon, 24 Feb 2025 20:56:52 GMT

Yes, the 750 hours would indicate you are a real estate professional in tax terms. You are considered to be a real estate professional (i.e., in a real property trade or business) if:

more than one-half of the personal services you provided during the year were performed in a real property trade or business in which you materially participated; AND
the number of hours in which you materially participated in this real property trade or business was more than 750 hours; AND
you must materially participate in each rental real estate activity unless you filed an election to group all rental real estate activities as one (and materially participate in that activity).

A 'real property trade or business' means any real property development, redevelopment, construction, reconstruction, acquisition, conversion, or rental operation, management, leasing, or brokerage trade or business.

This is still reported on Schedule E and answer the question 'I spend more than 750 hours a year actively involved in real estate (sales, management, etc) and I have complete records for this time.' This will eliminate passive activity limitations.

This will be reported on your personal tax return since you have a single member limited liability company (SMLLC).

@mlw424