All Forum Posts by: Cameron Marmon

@Cameron Marmon Since you're married and living in Texas, a community property state, you have the option to treat your 50/50 LLC as a disregarded entity for federal taxes. This allows you to report the rental income and expenses directly on Schedule E of your joint tax return, simplifying your tax filing process. The IRS automatically classified your LLC as a partnership when you requested the EIN, which requires filing Form 1065 and issuing K-1s to both of you. However, you can file Form 8832 (Entity Classification Election) to change the LLC’s status to a disregarded entity, provided you act promptly.

If you don’t make the election, you’ll need to file Form 1065 by March 15, 2025, adding complexity but retaining the same tax benefits, such as deductions for depreciation and repairs. Electing disregarded entity status avoids additional filings while achieving the same tax outcome.

This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.

Thank you, Ashish. I was thinking Form 8832 is the one, but I am confused when I get to question #3 since this entity is technically owned by more than one individual. So I dont think I can say No here, or can I since we are married in a community property state?

3. Does the eligible entity have more than one owner?
Yes. You can elect to be classified as a partnership or an association taxable as a corporation. Skip line 4 and go to line 5.
No. You can elect to be classified as an association taxable as a corporation or to be disregarded as a separate entity. Go to line 4.

0 Votes

Quote from @Michael Plaks:

Quote from @Cameron Marmon:

Hello everyone,

In July 2024, I created a partnership LLC with my girlfriend to buy a rental property. We are now married and I expect we'll file our 2024 taxes jointly. We live in Texas, a community property state, and are 50/50 owners. I assumed we would be able to file taxes for this LLC as a disregarded entity since we are married and in a community property state. However, when I requested our EIN the letter stated, "Based on the information received from you or your representative, you must file the following forms by the dates shown. Form 1065 03/15/2025."

You're in luck! It's a perfect excuse to divorce her before too late. :) Just kidding of course.

Call the IRS business line 800-829-4933, put it on speaker and do something while holding for an hour. When they pick up, explain that you meant for your LLC to be a disregarded entity and you HAVE NOT filed any tax returns yet. Skip the gf->wife part, it is now irrelevant, just say "with my wife." And congrats on your marriage.

Thank you, Michael! Just curious, is there any tax benefit to filing as a regular partnership and issuing k-1s to ourselves that show a loss? Would that lower our tax liability from other income we receive or no because this is purely RE and not an operating business?

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Quote from @Cory St. Esprit:

I guess the first assumption is - you still have the asset under the entity right? As in the entity is the name on the deed? If so, I would consult an attorney on the best way to proceed forward. You can typically change the way the entity works - may or may not make a tax difference, but you're only 6 months in so I imagine you're showing a paper loss anyways?

Hi, Cory. Yes, we still own the asset in the entity and the deed reflects that. Yes, we will have a loss for 2024.

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Quote from @Sharon Bancroft:

@Cameron Marmon

I had this same situation and my tax accountant filed the change for me ( one time filling) and we now file it on our personal as a disregarded entity. Check with your tax accountant.

Thank you, Sharon! Do you know what form they used? I thought it may be Form 8832, but it doesn't appear to be the right one based on the questions it asks.

0 Votes

Hello everyone,

So I think I messed up when establishing this LLC and chose for it to be treated as a partnership. Do I now need to change our elected status or tax classification to be a disregarded entity? Or am I just SOL and need to file a partnership return and issue K-1's to each of us? Or can I do nothing and file it on Sch E since we are married in a community property state?

Any guidance is appreciated and I know it's not tax nor financial advice, just your thoughts.

2 Votes

@Steven Hamilton II and anyone else who can help, I'd appreciate your opinion on my situation.

Any guidance is appreciated and I know it's not tax nor financial advice, just your thoughts.

0 Votes

Hey Telless, you may check out the Dallas Builder Association. Basically, home builders, suppliers, etc. can be members and receive benefits for their membership.

https://dallasbuilders.com/

1 Vote

Dallas, Texas

In the past, I have looked at the homes that are listed for rent and been on the market for awhile to give me an idea of the ceiling for an area. That info obviously won’t tell you what homes are renting for, but it does tell you what they aren’t renting for.

0 Votes

Dallas, Texas

I think there is a filter for that on Zillow, otherwise an agent can pull that data from the MLS.

0 Votes

Dallas, Texas

Fox and Hound in Richardson on Campbell may be a good spot. A group used to meet there regularly.

1 Vote

Dallas, Texas

All Forum Posts by: Cameron Marmon

Cameron Marmon has started 17 posts and replied 63 times.

Post: Did I mess up when establishing this LLC for my wife and I?

Post: Did I mess up when establishing this LLC for my wife and I?

Post: Did I mess up when establishing this LLC for my wife and I?

Post: Did I mess up when establishing this LLC for my wife and I?

Post: Did I mess up when establishing this LLC for my wife and I?

Post: Filing a 1065 Partnership return Husband/Wife vs Schedule E

Post: Dallas builders/developer directory

Post: Recently rented homes

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