W2, K1 and Rental Propoerty, what schedules need to be filed

[5341981]

I m employed (W2), and have two LLCs (single member) for rental properties. For the first, I'm receiving a K1, the second one I'm running by myself. 

What schedules do I need to file for the above case? 

[RSUMan]

A single member LLC is a disregarded entity for IRS purposes.  You should not have a K-1 associated with a single member LLC that owns a rental property where you are the single member.

The revenue and expenses and depreciation of the two rentals should be reported on Schedule E.

The biggest error I see is taxpayer does not set up the rental property as an asset in the Rentals TurboTax interview in the first year of ownership and begin to correctly depreciate the rental property.

The land value cannot be depreciated; only the value of the structure or improvements.

[mbpeddie]

Hi Conrad!

Great question!

Because you are a W2 employee you will report your W2 income on line 1 of your 1040, Individual Tax Return.

The K1 for the rental property will be reported on line 5 of schedule 1 and will carry to line 8 of your 1040.

The single member LLC that you are filing yourself will be reported on a schedule C and appear on line 3 of your schedule 1 and carry to line 8 of your 1040.

Sound complicated  Absolutely not! Turbotax will take care of all of this for you!

Simply go to the Wages and Income section of the Federal interview when you are working on your return.

Turbotax will ask you questions as to whether you were an employee and prompt you to enter your W2 information. There will also be additional questions as to whether you received a K1 and you willl enter the information from your K1. You will also have questions on self employment income which is where you will enter your income and expenses for the single member LLC you are running yourself.

These are all sections of the wages and income area in the federal interview. To see the extra sections , click on " add more income" and you will see the various income sections.

Everything you enter in the federal interview will carry to the state returns.

If you need assistance when preparing your return, click on the "live help" icon and a tax expert will be able to assist you by phone or chat.

Hope this resolves your question Conrad!

Mary, tax expert 10 years experience

[5341981]

Thank you for the fast reply! Explanation of the LLC and K1. It's a group of multiple investors that jointly own a rental property. I invested via a LLC (single membership) into this group-owned property. I assume it is still Schedule E then.  Thank you for the detailed answer!

Follow up question: Made investments into the property (self-managed) that exceed income by approx 5x. Can I write off those expenses over 5 years? 

[RSUMan]

Your single member LLC that invested in the multi member LLC is disregarded by the IRS.  Enter the K-1 information on your individual tax return in the partnership section of TurboTax.