How to Handle My Mobile Homes Rental Income?

[Edward Salazar]

Hello everyone and thanks for any feedback. This year i bought and renovated a few mobile homes in FL under the same LLC and already rented them out. The income is coming in to the LLC's bank account. My questions are: How would I be taxed on this income? What deductions can I use? The money I used to renovate them and acquire them, was mostly from my own cash (no bank or personal checks to prove amounts), could I use this cash as an expense? Since the mobile homes depreciate, can I use the depreciation against the income? and what would be the best way to get the income out from the LLC?

I appreciate any guidance on this matter

[Janene Tompkins]

First, disclaimer: this is not tax advice. Please seek out a CPA or EA for your individual tax situation.

Ok, now then. An LLC is a pass-through entity. Net income from the LLC passes through to your individual tax return. As for the cash you put into the LLC you could allocate it different ways, as a capital contribution or as a loan to the LLC. The expenses you incurred in getting your business started could be deducted against the business income. And yes, use that depreciation! This all goes on the LLC's K-1. The net income or loss from the LLC's K-1 is then reported on your individual return. Don't forget the new 199A deduction! Depending on several factors, mainly do you meet the test to call yourself a "real estate professional", you may be able to use the LLC losses to offset regular income. If you do not meet certain tests, the losses are deferred. There are multiple steps in this process, please hire a good tax advisor. Good luck!