New LLC

[johnslic]

I formed a new LLC in 2023 for AirBnB  rental.  It is a side business to supplement my retirement income.  The LLC is jointly owned by my wife and me, and we live in a communal property state.  The property is not owned by the LLC.

From previous posts, I understand I can treat the LLC as a disregarded entity.  Does that mean, I dont have to file a Form 1065 ?

Does TT Premier have provisions to generate the Form 1040 Schedule E, or do I have to use a different version ?

[Steph49]

For federal purposes, an LLC jointly owned by husband/wife can be treated as disregarded if there are no other partners and you wouldn't need to file a 1065. However, for certain states such as NYS, the state treats husband wife LLC's as partnerships and you would need to file an IT-204 (NYS form) or other state partnership tax return and k-1s. Since the property is not in owned by LLC, the IT-204 (or other state partnership return) wouldn't actually report any of the air b&b activities on it. I would recommend having a lawyer in the state your property is held contribute it to the LLC for liability protection (which then you would need to report the state activities on a partnership return if the state required it).

 I also have a similar situation but my properties are contributed to LLC's and I find it easier to file the 1065 first. (however I don't know your situation, but i did not find the 1065/k-1s on turbo tax very easy to prepare as there was a lot of manual checking and calculating on my end, and I have been working on partnerships for 10+ years. Partnership rules are also complex and i would be recommended to consult with a cpa on this).

Not sure on your schedule E question

- From a CPA

[Vanessa A]

No, you do not have to file a 1065. Yes, if you live in a community property state, you can treat the LLC as a Disregarded Entity and use TurboTax Premier to file your return.  However, if you are a disregarded entity, you file a Schedule C instead of a 1065.  The Schedule C is for individuals (which you would be considered in a community property state even as a couple), the 1065 is for partnerships that are not disregarded entities. 

Yes, TurboTax Premier will handle a Schedule E.  But, since you will be filing a Schedule C for the business, unless you have other investment income, you would not need to file a Schedule E.  

AirBnB income, is generally reported on a Schedule C since this is not passive income.  It requires more work like a hotel does.  So the AirBnB income is treated more like hotel income than rental income. Also, you will BOTH need to file a Schedule C reporting half of your income and expenses on each Schedule C.

Which state do you live in? State laws vary, some states may require that you still file a 1065 or other business tax form for the state