turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

Steve30
New Member

Inherited vacation property: To pay expenses, we created an LLC which rents the property year-round. Where does the depreciation belong, if any? The LLC? Individually?

Three siblings inherited the property equally in Dec 2015. The multi-member LLC was set up to make tracking rents and expenses easier. I'm not sure it accomplished that, but that's the way it is.

On LLC taxes, the CPA did not include the property and did not depreciate it either on the LLC's taxes or our individual taxes. The LLC made a profit. One sibling (me) is managing the rentals, and the other two are essentially passive.

Do I add the property as an asset to the LLC? A "Loan from Shareholders"? Owner's Capital Equity? Should it be depreciated in the LLC? Something else? TIA for any help.

x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

1 Best answer

Accepted Solutions

Inherited vacation property: To pay expenses, we created an LLC which rents the property year-round. Where does the depreciation belong, if any? The LLC? Individually?

The property should be part of the LLC and show as a contribution to capital and transferred to LLC.  This would be the easiest way as LLC is renting it.

Otherwise, each would show depreciation on their 1040's with $0 income and that will cause other issues with IRS or losses not being able to be claimed. 

View solution in original post

2 Replies

Inherited vacation property: To pay expenses, we created an LLC which rents the property year-round. Where does the depreciation belong, if any? The LLC? Individually?

The property should be part of the LLC and show as a contribution to capital and transferred to LLC.  This would be the easiest way as LLC is renting it.

Otherwise, each would show depreciation on their 1040's with $0 income and that will cause other issues with IRS or losses not being able to be claimed. 

Steve30
New Member

Inherited vacation property: To pay expenses, we created an LLC which rents the property year-round. Where does the depreciation belong, if any? The LLC? Individually?

Thank you! Excellent points. Do you think I should Use Form 3115 to correct last year's mistake of not reporting the property? Also, I asked this on another thread, but when I include the property in Turbotax Business, it insists the property is domestic, will not let me enter a Cancun address, and will not apply the 40 year period. How do I specify it's a foreign address?
message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question
Manage cookies