IRS Form 8825 - Other Misc. Expenses

[Mark Lucido]

Is there an expert on the 8825 that can advise what's the best way to handle Misc. Expenses such as Accounting, Office Expenses, Suplies, Tools, etc.? I just started my LLC in 2015 and filed my return last year logging these transactions under standard Business Expense deductions instead of on the 8825. This ends up showing a business loss (since all my income is on the 8825 under Rental Income) and when it comes time to do my personal taxes, I end up having to enter two separate K1's in Turbo Tax on my personal return: one for the Business Income/Loss and one for Rental Income/Loss. Does it really matter where these expenses are tracked?

Thanks

mark

[Lance Lvovsky]

Yes, it does matter where the expenses are tracked. All of your rental expenses should be on Form 8825. You should not be reporting rental expenses attributed to your rentals on page 1 of Form 1065.

I would put accounting expenses under "Legal and other professional fees". Any expenses that don't fall under one of the categories on Form 8825 can go on a separate line item. 

The net rental income or loss will be reported in Box 2 of Schedule K-1, "Net rental real estate income (loss)".