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Level 1
posted Feb 19, 2025 4:18:26 PM

Questions Regarding LLC Ownership and Tax Implication

Hello,

 

I am currently the sole and 100% owner of an LLC that owns a rental property in another state. I have a couple of questions regarding potential changes to the ownership structure.

1. If I decide to add my girlfriend as a co-owner of the LLC, will this be considered a taxable event?

2. If I add my girlfriend as an owner, can I continue to claim 100% of the depreciation, or would she also need to report 50% of the rental income on her taxes?

 

Thank you for your assistance!

0 1 916
1 Replies
Expert Alumni
Feb 19, 2025 4:25:55 PM

An LLC is a legal structure, not a tax entity. As a sole owner, you status is disregarded and you file on your own return. 

1. If you add a partner, you become a partnership and file form 1065. It isn't taxable to change your structure.

2. The partnership would take over the house and you would each receive k-1 forms for your share of the business that you own.