1099-S Airbnb Business

[ChristopherMagic]

I sold one of my rental properties and I'm not sure where to record the 1099-S in TurboTax.  I have several properties and an LLC.  One of the properties under the LLC was sold.  I'm a little confused as I own several properties and everything I find seems to point to setting this sale up as a separate  "Profit or Loss From A Business" When I search for help on TurboTax, I receive this message:

A rental property is real estate (like a house, apartment, duplex, etc.) that's leased or rented out to others, with some exceptions.

The most common exception is if the average stay at your property is 7 days or less. For example, you rent out your home or a space in your home as a bed and breakfast or by using the popular website, Airbnb.

If your rental property falls under this or any less common exceptions (see below), you'll have to report income and expenses from your property in the Profit or Loss from Business section (in TurboTax Self-Employed that has a Business tab) or Business Income and Expenses section (all other versions of TurboTax).

I would appreciate any help for anyone that has had a similar situation.  Thank you!

[Critter-3]

There is no place to enter a 1099-S directly ... instead the info on that form is used to sell off all the assets.

In the Sch E section you will indicate the property was sold and then in the asset section you will sell off each asset listed.  If you have not been depreciating the assets then RUN to a local tax pro to get this error corrected properly.  

[Carl]

Additional clarification may be needed here.

I sold one of my rental properties and I'm not sure where to record the 1099-S in TurboTax.

The above statement indicates that you and you alone own this rental property and it is not owned by any LLC, be it single member LLC or Multi-Member LLC.

We have several properties and an LLC.

The above statement seems to indicate that the property (among other properties) are in a multi-member LLC with that reference to "WE". If that's the case, the sale of this property would therefore be initially reported on the 1065 partnership return, and proceeds to each partner would be included on their respective K-1. Then it's the K-1 that gets entered on the personal 1040 tax return of each member.

[ChristopherMagic]

My wife and I have an LLC.  This particular condo was one rented on airbnb by our LLC.

[Carl]

Then the sale is reported on the 1065 Partnership return. That's the only way to show property depreciation recapture and take suspended losses if any. Each partner's share of any gains/losses will be reflected on each of your K-1's.

Also note that if this is for a 2021 partnership return, your partnership return is late, as it was due March 15th. If an extension was filed, then it was due Sept 15th. The late filing penalty is $205 per month, per partner. So you may be looking at some hefty late fees.

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@ChristopherMagic  wrote:

My wife and I have an LLC.  This particular condo was one rented on airbnb by our LLC.

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In which state do you reside and how have you been reporting the rental income and expenses on past income tax returns?

[Carl]

My wife and I have an LLC

Then you have a multi-member LLC. Such an entity files a 1065 Partnership return.

In the community property states of Louisiana, Arizona, California, Texas, Washington, Idaho, Nevada, New Mexico, and Wisconsin if you have a multi-member LLC where there are only two owners, those two owners are legally married to each other, and those two owners will be filing a joint 1040 tax return, they have the option of splitting all business income and expenses down the middle and each partner reporting their share of the business income/expenses on a separate SCH C for each tax filer on the joint return. That means your joint 1040 return will have two SCH C’s included with it – one for each owner.

But this can present it's own problems since your typical rental is reported on SCH E. There are situations where it would be correct to report on SCH C. But just being an AirB&B short term rental is not always enough.

How have you been reporting the rental income/expenses in prior years?