topic We have a rental property owned by an LLC with our living trust as the sole owner. Do owner distributions against business equity get entered in a 1040? in Investors & landlords

We have a rental property owned by an LLC with our living trust as the sole owner. Do owner distributions against business equity get entered in a 1040?

CGWL — Mon, 23 Feb 2026 10:59:08 GMT

We have a rental property owned by an LLC with our living trust as the sole owner. We file Schedule Cs for my husband and I for the LLC and a Schedule E for the rental property on our 1040. We plan to take owner distributions against the business equity account. It is our understanding, the owner distributions against business equity do not count as personal income. Is that correct? If not, how and where is it entered in the home/business Turbotax?

Re: We have a rental property owned by an LLC with our living trust as the sole owner. Do owner distributions against business equity get entered in a 1040?

Anonymous_ — Tue, 10 Jan 2023 00:40:24 GMT

What do you mean by "owner distributions"?

Your LLC is a single-member LLC since the trust is the only member while your trust appears to be (and almost certainly is) a grantor trust. As a result, both entities are disregarded for federal income tax purposes, and you can report on your 1040.

Again, however, you used the term "owner distributions" so you need to clarify what that term means to you (e.g., withdrawal of income from a bank account, withdrawal of principal, etc.).

Re: We have a rental property owned by an LLC with our living trust as the sole owner. Do owner distributions against business equity get entered in a 1040?

CGWL — Tue, 10 Jan 2023 01:34:31 GMT

It would be a withdrawal of income from the business account to us the trust trustees.

Re: We have a rental property owned by an LLC with our living trust as the sole owner. Do owner distributions against business equity get entered in a 1040?

Anonymous_ — Tue, 10 Jan 2023 01:45:11 GMT

Yes, but you need to report the income on your return whether you withdraw it or not.

Re: We have a rental property owned by an LLC with our living trust as the sole owner. Do owner distributions against business equity get entered in a 1040?

CGWL — Tue, 10 Jan 2023 02:06:11 GMT

Yes all the income from the rental will be reported on schedule e of the 1040. However, our question is related to the amount we withdraw. It is not entered as personal income in addition to business income, correct?

Re: We have a rental property owned by an LLC with our living trust as the sole owner. Do owner distributions against business equity get entered in a 1040?

Anonymous_ — Tue, 10 Jan 2023 02:38:30 GMT

Withdrawals are not necessarily all income. You should know how much income your rental is producing and that is the figure you report on your return.