tax filing under LLC or personal rental income?

[Don Spafford]

This is my first year holding rental property. I hold title to it in an LLC but the mortgage is in my name. While filling out my taxes I placed the rental income as the LLC income, thereby creating it as business income subject to self employment tax. With depreciation it is a loss and therefore self employment tax is 0. My question though is, would it be better to file it under Personal Rental income rather than income through an LLC? Since it is a sole LLC, it is a pass through entity anyway. I do have a tax id number for it but I don't know if that means I have to file with it or not. Just trying to verify the best tax strategy. Thanks for the continued BP community support.

[Logan Allec]

@Don Spafford Running a business through an LLC or not (assuming LLC has not made an election to be taxed as a corp or S corp election) has no bearing whether it's subject to self-employment tax. Assuming this is just a plain vanilla rental, it should not be subject to self-employment tax, and it belongs on Schedule E, not Schedule C, where it sounds like your tax software is currently putting it. I'd recommend you work with a tax professional to make sure everything's done right because it just gets more expensive to fix things later on...that whole "ounce of prevention" thing.