Filing rental income under personal vs LLC?

Question

Hi, in 2018 I moved some of my properties under my personal name to a single member LLC in the middle of the year. Should I be reporting rental income & expenses separately during the two time periods, (before and after moving them to LLC) or can I just report the whole year of income & expense together under the LLC?

Thanks,

Ray

Thanks,

Ray

Linda Weygant · Answer

Hey, William - I am SUPER confused here.  Didn't you post this:

William Clark's StatementWhere you said this:After a lot of reading and watching videos (besides this being common sense from my point of view) is that I need to bring something of value to the table.  For anyone who may not know, the "table" is where I come for ideas, whether it's for a transaction, renovation, structure, etc.  I have no money to bring to the table, but I have no problem providing sweat equity and I'm also about to become a certified residential home inspector.  What value does anyone else bring to the table?

But then, just above here, you said this:"I'd still pull in a bigger check than your accountant job.  ;)."

Sounds to me like the only thing you're pulling is your own ego. For a dude who has been here less than 90 days and has 13 posts to his name, 3 of which are you pretty much being a jerk to professionals with a lot more experience, my best advice would be for you to tone things down, just a tad. If your goal was to bring something of value to the table, you haven't done that either.

@Basit Siddiqi and Eamonn have been contributors for a while and lend their expertise in knowledgeable and helpful ways.  Bigger Pockets does have a Be Nice, Be Respectful policy, which you've done neither of here.

Craig Jeppesen · Answer

It all depends how you setup the LLC. If you did it right you will still use schedule E on your personal taxes. You will want to show your paperwork to your CPA to make sure you don’t have to file a corporate or partnership return as well.

Eamonn McElroy · Answer

@William Clark

My friend...  Obama wrote The Audacity of Hope, you have just written The Audacity of Ignorance.

Best of luck in life.

Ashish Acharya · Answer

Nothing will change on how you were reporting.

SMLLC is disregarded for tax purposes, so you will still report everything in your personal schedule E. There is no LLC return.

Basit Siddiqi · Answer

@Ray LiYou got some solid advice already in this thread - just to recap

You will report the full year rental activity on schedule E. You just need to report 1 activity - You don't need to split it between the period you held it personally and the period you held it under the LLC.Schedule C is for business/ordinary/active income. You will not report passive rental activity here.

William Clark · Answer

@Eamonn McElroy.  First of all, you started off with "My friend.....Obama" enough said (I'm sure you have absolutely no political humor, but I don't care), 2d If I did write that book, even if it was on the bottom of the best sellers list, I'd still pull in a bigger check than your accountant job.  ;).

William Clark · Answer

Eamonn McElroy, everyone can research and come to their own conclusions.  If YOU have a problem with what I'm saying, then YOU can just scroll by and not worry about it.  I can put CPA by my name as well.  I can have graduated absolutely LAST in my class to get my credential as a CPA, doesn't mean I'm worth what I'm being paid.  I've done enough research to know that there are "CPA's" out there that acknowledge "tricks of the trade" that investors do, that "CPA's" were not aware of because there are some things that investors look for that "CPAs" don't have in their skill set.  NOT all, but some.  Thus, the encouragement for people to do their own research since it's THEIR business/company and NOT YOURS, it's in THEIR best interest.  They come to their own conclusion rather than settle for the response of someone who's egotistical because they have a "CPA" behind their name.  If my post on here hit a nerve to you, maybe you're the guilty one (you know, the one who's advice isn't as sound as you assert).  Just a thought.  Other than that, breathe, relax.

Eamonn McElroy · Answer

@William Clark

"I've done plenty of research on this particular topic and not all the advice you're receiving here is sound advice."

Why don't you call out what isn't sound, explain why it's not, and lay out correct treatment based on your research.  That would certainly provide more value to members of this forum than a vague assertion.

Everyone who has responded to @Ray Li prior to you is a CPA, not non-tax pros googling "these topics out in order to provide sound advice."

William Clark · Answer

Ray Li, I would like to strongly encourage you to seek out some advice elsewhere as well to get plenty of input on this.  I've done plenty of research on this particular topic and not all the advice you're receiving here is sound advice.  It's really frustrating because those who respond can EASILY google these topics out in order to provide sound advice.

Eamonn McElroy · Answer

@Ray Li

It's advisable to engage a tax CPA/EA if you aren't comfortable with the tax preparation process.  I saw your other post and it appears you're asking pros on this forum specifics as it relates to your return for DIY preparation purposes.  Nothing wrong with that, as long as you understand the scope of this forum is general advice and you shouldn't extrapolate information on here to specific advise regarding your return and/or situation.

@Ashish Acharya is correct here regarding federal treatment.  If you haven't made a corporate election for the SMLLC, it is disregarded for federal tax purposes and all activities and assets of the SMLLC are dissolved into the activities and assets of the owner.

For California, it appears you are managing the LLC from California.  If so the LLC is 'doing business in CA' and you have exposure to the CA Form 568 and $800 annual LLC tax.

Filing rental income under personal vs LLC?

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