Rental Property LLC

Forum|Forum|3 years ago
December 28, 2022
12 replies
126 views

My Wife and I have had a rental house for several years and used TT to file our taxes. This year, we paid off the house and established an LLC for the property. The LLC is owned by my wife and I and is registered in the state of Texas. Establishing the LLC has raised a few questions for filing this year. I'm hoping someone can help.

1) Which TurboTax do I need this year (Premier, Home & Business or Business)?

2) I want to claim the cost establishing the LLC. Do I just claim it as an expense under the property? If so, what category?

3) I know from reading several discussions that I don't need to file a schedule C since this is passive income. That said, is there anything special I need to do besides filing my normal joint return?

Thanks for any advice you can provide!

Best answer by Anonymous_

A multi-member LLC typically files Form 1065, which is supported by TurboTax Business (and none of the other TurboTax products).

However, since you live in a community property state and if you hold your interests in the LLC as community property, you have the option to treat the LLC as a disregarded entity and file the rental income and expenses on your individual income tax return (Form 1040 - Schedule E).

See https://www.irs.gov/pub/irs-drop/rp-02-69.pdf

The foregoing option would require filing one Schedule E for you and another Schedule E for your wife according to your interests.

Anonymous_Answer

Level 15

A multi-member LLC typically files Form 1065, which is supported by TurboTax Business (and none of the other TurboTax products).

See https://www.irs.gov/pub/irs-drop/rp-02-69.pdf

The foregoing option would require filing one Schedule E for you and another Schedule E for your wife according to your interests.

TexasBoy1962Author

Level 2

First, thanks you so much for the quick advice. Unfortunately now I have another question. Since the LLC will be considered a disregarded entity, does TT know I have to have individual Schedule Es for our joint return or do I need to somehow generate manually? Thanks in advance!

Anonymous_

Level 15

TurboTax will not prepare separate schedules automatically, but you can easily provide the input for two separate schedules for the same property (e.g., one with 50% for you and another with 50% for your wife).