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LLC tax question
Posted on 1/15/25 at 9:56 pm
Posted on 1/15/25 at 9:56 pm
I usually use turbo tax every year to do my taxes.
Like the poster had earlier, pretty basic - w2, 1099, brokerage.
Question -
Last year I stayed a LLC to get into rentals. Ended up not buying anything (yet) so literally have done nothing. Is this going to complicate things too much to not be able to do myself or should it be pretty basic enough?
Like the poster had earlier, pretty basic - w2, 1099, brokerage.
Question -
Last year I stayed a LLC to get into rentals. Ended up not buying anything (yet) so literally have done nothing. Is this going to complicate things too much to not be able to do myself or should it be pretty basic enough?
3
Posted on 1/15/25 at 10:36 pm to Bob Sacamano 89
You'll have nothing to report on the LLC if you've had zero activity.
Posted on 1/16/25 at 7:03 am to Bob Sacamano 89
If you own 100% of the LLC you can report rental activity on schedule E and business activity on schedule C thus avoiding the necessity of preparing Form 1065. as well. This applies to all levels of activity
Since you have no activity to report, there is no need to prepare a seperate return for your LLC.
Since you have no activity to report, there is no need to prepare a seperate return for your LLC.
Posted on 1/16/25 at 7:18 am to UpstairsComputer
You'll have nothing to report on the LLC if you've had zero activity.
I would think there would be no issue unless you are trying to claim business expenses.
I have rental properties in multiple states and never felt the need to create a LLC. I may be naive, but I don’t see the advantage. Maybe I am missing something?
I would think there would be no issue unless you are trying to claim business expenses.
I have rental properties in multiple states and never felt the need to create a LLC. I may be naive, but I don’t see the advantage. Maybe I am missing something?
Posted on 1/16/25 at 7:32 am to CHGAR
I am 50/50 with another person.
I am assuming this doesn’t change anything.
And when you say nothing to report, you mean I don’t even have to mention it in my filings? It makes sense to me but I know the government can be finicky
I am assuming this doesn’t change anything.
And when you say nothing to report, you mean I don’t even have to mention it in my filings? It makes sense to me but I know the government can be finicky
Posted on 1/16/25 at 7:33 am to Motownsix
I was under the understanding it’s a protective layer if litigation happens that can prevent one from coming after my “personal things,” like house, savings, etc.
if this is untrue I am more than fine with simplifying and dissolving it lol
if this is untrue I am more than fine with simplifying and dissolving it lol
This post was edited on 1/16/25 at 7:35 am
Posted on 1/16/25 at 7:56 am to Bob Sacamano 89
It is true that it provides a layer of protection. Where people get in trouble is when they pierce the corporate veil. IE using the LLC to funnel a significant number of personal expenses through it. If you're using it for its intended use, it is a very valuable layer of protection.
So, having multiple LLC's to own your personal things (house), you would have another LLC that manages the rental properties you have and run the revenue and expenses through it as normal. Just be very careful trying to claim yourself as a real estate professional. The IRS makes it practically impossible to claim this unless you're a licensed realtor.
Personally, I find it more advantageous to have a trust own the LLC for your personal home and other personal assets. That way when they pass on to your beneficiaries, they can avoid estate tax and probate fees. Additionally, a will is public information and a trust is private. If you want an additional layer of anonymity, a trust owning the LLCs is the way to go.
So, having multiple LLC's to own your personal things (house), you would have another LLC that manages the rental properties you have and run the revenue and expenses through it as normal. Just be very careful trying to claim yourself as a real estate professional. The IRS makes it practically impossible to claim this unless you're a licensed realtor.
Personally, I find it more advantageous to have a trust own the LLC for your personal home and other personal assets. That way when they pass on to your beneficiaries, they can avoid estate tax and probate fees. Additionally, a will is public information and a trust is private. If you want an additional layer of anonymity, a trust owning the LLCs is the way to go.
Posted on 1/16/25 at 8:22 am to Bob Sacamano 89
It can provide the layer you refer to. But be careful with mixing llc business activity with personal. You should use different credit card and bank accounts. You should not claim llc expenditures if you paid for them with personal funds. Mixing the 2 allows an auditor to claim that the llc is in name only if you are mixing funds.
Posted on 1/16/25 at 8:30 am to Bob Sacamano 89
Just look into the state side of it. I'm pretty sure in Alabama for example, there is a $50 business privilege tax.
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