STR Operating Model for Tax Benefits

[Jason Smith]

Hello All,

I wanted to get some feedback based on a recent discussion with my CPA. I have a STR property that is in a FL land trust and I set up an LLC to property manage this property (collect rents, etc). I self manage, have material participation status and file on a schedule C. The concern he had and to be fair he said he needed to research it (i am just doing some of my own) was that since most of the work and hours will be conducted in LLC now and the LLC does not own the property would that create any issues with my ability to file a schedule C and claim depreciation and losses, etc? I own both the LLC and beneficiary of the trust. If there are any materials (IRS, expert, etc) that you can direct me to so that i can clarify this situation that would be greatly appreciated.

Thanks

[Basit Siddiqi]

Having an LLC(if it is a single-member LLC) means that it is considered a disregarded entity.

Therefore, you would report it as if you own the activty/property directly.

Most rental properties(STR included) is reported on Schedule E. There is an exception where you also provide substantial services, where it would then be reported on schedule C.

If your accountant is unsure, why stay with them?
They can mess things up and report things incorrectly which can lead to an audit.