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Llc Rental Property

PostPosted: Thu Dec 15, 2016 2:59 am
by shain
s About Taxes)/LLC Rental property Advertisement Expert: John Stancil, CPA - 2/11/2011 My sons and I have formed an LLC. I loaned the partnerhip the monies to buy 4 rental properties. I am preparing the 1065.

The interest the partnership is paying me on the loans for the rental.  Should I allocate to the 4 properties or does the interest amount go on page 2 of Schedule e for each invidual members.If it does how and where on schedule E is it reported. I am claiming the interest income on my 1040. I have researched this subject and cannot find an answer.  Thank you

ANSWER: Diana,

Thanks for your question.

Unless you hold a security interest(recorded at the court house) on the properties to secure the loan, it is interest expense, reported on line 15 of page 1 of the 1065.  This would make it a part of the ordinary gain or loss included in line 1 part III of the K-1.

Hope this helps.

John Stancil, CPA

---------- FOLLOW-UP ----------

Thank you for answering my question so quickly. When preparing the 1065 I have put all of the expenses of purchasing the property, legal fees,

closing cost and milage assoicated with the finding the properties in the basis is this correct or should I include these expense on page 1 of the 1065? Am I correct that the rental income is not subject to self-employment tax. We formed the LLC mainly for liability benefit.

Thank you again.

Llc Rental Property

PostPosted: Sat Dec 17, 2016 3:21 am
by Severin
Diana,

Fees or costs that are associated with a particular property go as an expense of that property.  Anything that is associated with the LLC in general goes on page 1.  Rental income is NOT subject to SE taxes.

Hope this helps.

John Stancil, CPA

Llc Rental Property

PostPosted: Sun Dec 18, 2016 5:32 am
by Berwyk
s About Taxes)/LLC Rental property Advertisement Expert: John Stancil, CPA - 2/11/2011 My sons and I have formed an LLC. I loaned the partnerhip the monies to buy 4 rental properties. I am preparing the 1065.

The interest the partnership is paying me on the loans for the rental.  Should I allocate to the 4 properties or does the interest amount go on page 2 of Schedule e for each invidual members.If it does how and where on schedule E is it reported. I am claiming the interest income on my 1040. I have researched this subject and cannot find an answer.  Thank you

ANSWER: Diana,

Thanks for your question.

Unless you hold a security interest(recorded at the court house) on the properties to secure the loan, it is interest expense, reported on line 15 of page 1 of the 1065.  This would make it a part of the ordinary gain or loss included in line 1 part III of the K-1.

Hope this helps.

John Stancil, CPA

---------- FOLLOW-UP ----------

Thank you for answering my question so quickly. When preparing the 1065 I have put all of the expenses of purchasing the property, legal fees,

closing cost and milage assoicated with the finding the properties in the basis is this correct or should I include these expense on page 1 of the 1065? Am I correct that the rental income is not subject to self-employment tax. We formed the LLC mainly for liability benefit.

Thank you again.