Yearly LLC Maintenance Expenses

[Rocco1231]

Hello -

I hope I explain this well enough so that folks understand the underlying question.  My wife and I created 3 LLC's back in 2022.  LLC 1 is a holding company for any LLC's that own rental properties, it does not hold the properties themselves.  LLC 2 bought a rental property in 2022 (and, accordingly, the LLC is owned by LLC 1).  LLC 3 was created for the sole purpose of fixing and flipping houses (we only flipped one in 2022, there has been no activity since).  Each LLC has its own yearly expenses, regardless if it owns property or not (registered agent fees and other yearly maintenance fees).

For LLC 2, which holds the rental property, I have added the income and expenses to Schedule E since 2022.   For LLC 1, I have added the yearly expenses for 2022 and 2023 to the Schedule E for LLC 2 since I didn't know where to put the expense that would be separate from LLC 2.  For LLC 3, I did the same thing in 2023; I added it to the expenses of LLC 2 on the Schedule E since I didn't know where to put it that would be separate from LLC 2 (since it flipped a house in 2022, that year's expenses were added to the Schedule C).

My questions is, is there a place in TurboTax where I can add the yearly maintenance expenses for LLC's 1 and 3 that would be separate from LLC 2, but still show up on Schedule E?  If you have any questions, please let me know.

Regards,

Mike

[RobertB4444]

Please clarify this for me - what tax returns are you attempting to file for these three LLCs?  I'm not completely following which expenses are going where but I could have made a chart on the wall with colored string like on a police tv show.  

You have three LLCs but you have not separated their activities.  I am not sure why you have created three LLCs in the first place.  I also don't know why your LLC is filing a schedule E.  

@Rocco1231 

[Rocco1231]

Hi Robert,

I knew I wouldn't do a good job at clarifying my situation, my apologies!  So all four of the LLC's are single member LLC's and are pass through to my personal tax return.  I don't have to file separate returns for them.

Two LLC's own one single family home each, once since 2021 and once since 2024.  For the one that has owned an investment property since 2021, I created a rental profile (if that's the right terminology) for it in TurboTax and have been deducting expenses on Schedule E since.  For the one that has owned an investment property since last year, I just created a second rental profile for it and will deduct its expenses accordingly on the Schedule E.  I have not mixed anything in regards to these two LLC's/properties.

The third and fourth LLC's do not hold any properties.  One of them is simply a holding company for the two that do own properties.  The other LLC was created for the sole purpose of fixing and flipping houses, not to hold them long term.  We did one fix and flip in 2022, but nothing since so it currently doesn't hold any assets.  Each of these two LLC's has their own expenses, i.e. registered agent fees and legal fees for the maintenance of the LLC's themselves.  If these LLC's don't hold any property and I can't add a rental profile in TurboTax for them, like the other two, where would I add the registered agent fees and legal fees on my tax return so I can deduct them from my overall business income?

I hope this helps, but please ask away!

[RobertB4444]

Ok, I'm with you now.  

The other two LLCs can be done one of two ways - 

1 - You can add a schedule C for each one to your personal return.  This is the easiest and doesn't require any other tax returns.  You'll scroll down in the 'Wages and Income' section of your tax return to 'Business Items' and the first line is 'Business Income and Expenses'.  This is where you will create a separate schedule for each of the other LLCs that do not have real estate holdings.  You'll enter any expenses and - if you have any in future years - you'll enter any income.

2 - You can file a separate corporate return for each of them.  If you have the LLCs taxed as either a partnership or an S-corporation then the expenses would be transferred to your personal return through a schedule K1 which would have you enter them directly into your personal return.  The advantage to this method is that the tax rate is lower if you have income to report.

Since you only have expenses and no income items for the two other LLCs I would just use the schedule C preparation for this year.

@Rocco1231 

[Rocco1231]

Thank you, Robert, this is a big help!  I appreciate you taking the time to answer these questions.