My wife's Mom passed away and my wife and brother-in-law inherited some rental properties from her. On the advice of their attorney, they created four LLCs; she and I have prepared Federal and Idaho state tax returns for all four LLCs. My question is: will Turbo Tax Premier provide me with the correct Federal and Idaho state forms or schedules to appropriately report our share of the income from the four LLCs on our personal returns for 2022?
Please let me know - thanks for your help.
Charlie Piozet
I am not a tax attorney or tax accountant so I am not 100% sure of how an LLC works. I can tell you that income from a Trust is distributed to each of the trustee's via a K-1 form and the LLC might work the same. I did tax the tax returns for my in-laws trusts after they passed and that is how we distributed any income earned by the trusts to the children of my in-laws, including my wife obviously. Each trustee reported the income on the K-1 issued to them (there were 3 issues, one for each child) on their individual income tax returns.
Another possibility is a 1099 type form. There is more than on type of 1099 and they added some new ones a year or two ago and there might be one for an LLC.
LLC income from rental properties is reported on Schedule E. If one person or person and spouse receives all the income from the LLC, just pass all the income onto the Schedule E, nothing difficult. Also, any expenses (taxes, insurance, purchases for the property) also pass to the Schedule E. If multiple filers receive the income from the LLC, the income and expenses are divided and reported according to the percent of the distribution to each recipient.