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Level 2
posted Jul 7, 2024 6:03:14 AM

I recently formed a single member LLC for income producing rentals that I inherited. I also have a W2 job. My question is can I simply attach Schedule E to my 1040?

The accountant I am hiring is telling me that I need to do either a Schedule C or become an Scorp. I don't want to do either-just want to use Schedule E.

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5 Replies
Level 15
Jul 7, 2024 6:45:05 AM

You would only report rental income on Schedule C if you are a real estate dealer or provide significant services to your renters.


See https://www.irs.gov/instructions/i1040se#en_US_2023_publink24332td0e1083

 

You would also report on Schedule C if you are in the business of renting personal property. Otherwise, you would report rental income and expenses on Schedule E.

Level 2
Jul 7, 2024 10:23:23 AM

Thank you! Now I need to convince the accountant I hired, although at this point I am thinking of continuing to do my own taxes.  I was afraid it would be too difficult for me with Turbotax.

Level 15
Jul 7, 2024 10:27:03 AM

You might want to consult with a different local accountant (tax professional).

 

Holding rental real estate in an S corporation can be disadvantageous for a few reasons and there should be no issue with simply filing a Schedule E for the properties with your 1040. 

Level 2
Jul 7, 2024 12:12:30 PM

Thank you for your reply. Out of curiosity why is holding real estate in an Scorp disadvantageous?  Thanks.

Level 15
Jul 7, 2024 1:37:34 PM