Please help! I've spent all morning trying to figure this out. My wife and I purchased a rental property in 2021 and formed an LLC where we are 50/50 members. We self-manage the property. In Turbotax, under the business tab, if I select Yes under 'Did you have any income and expenses for a business in 2021?' it makes me enter my rental income on Form 1099K. I don't think this is correct. However, under the Rental and Royalty section, I select my wife and I are both owners, but it never asks for the LLC/EIN/partnership information.
Which direction do I go? Or do I skip the business section and enter everything under personal?
Thank you so much in advance!
Nick
Real estate rental income and expenses are entered in the Rental Properties and Royalties section of TurboTax Home & Business.
However, unless you and your wife hold your interests in the rental property as community property in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin), you will have to file a Form 1065 for your multi-member LLC.
See https://www.irs.gov/instructions/i1065#en_US_2021_publink11392vd0e555
You might want to seek professional tax guidance for your scenario.
There are a couple of considerations. The first is whether your LLC is a Partnership or a Qualified Joint Venture. If you live in a community property state, you qualify as having a QJV. If not, you will need to file a partnership return and will need the business program.
The second is that unless you are real estate professionals, you are not self-employed for Schedule C purposes. You would enter your income and expenses on Schedule E.
Please see this LINK for a detailed discussion.
Thank you. We are in Virginia, so not a community state.
@nickmarksthespot wrote:
Thank you. We are in Virginia, so not a community state.
Then you will have to file a Form 1065 for the LLC.
You should definitely seek professional guidance, particularly since this is your first year filing a return for an entity.
a partnership return requires Turbotax Business. it is only available for purchase as CD or download - no online version. it can only be installed on a Windows computer
https://turbotax.intuit.com/small-business-taxes/
if a partnership return is needed it's due 3/15/2022
failure to file can result in a penalty of about $400/month for each month late max is about $4,800