Rental Income, LLC

[Unregistered]

What would you minimum fee be Jack?

My minimum for an LLC is $600, but rises dramatically if they need a Schedule L, M-1, M-2, etc.

I also give a 10% discount to LLC's that I do the books for and give the same discount to members or shareholders who come to me for 1040 preparation.

How much would you say is a reasonable base fee for an LLC or S-Corp return?

Just trying to stay comparable, even though I am in NC.

Thanks!

[geekgirldany]

Wow! Well I am alot cheaper. I charge $250 for corporate, partnership, LLCs. I charge extra if I have to do bookkeeping.

I don't even think the guy got a EIN number.

[Unregistered]

are you doing a 1065 or 1120 in less than 2 hours?

if not, you're are cheating yourself! if wouldn't be worth my time to touch a parnership return that had done any kind of operations during the year for less than $600.

[Matt Sova]

I stand corrected

OldJack:

I musta been drunk or sumpin thinking partnership thoughts instead of LLC. You are correct a 1065 has to be filed by an LLC being taxed as a partnership.

$500 for an LLC with clean books and records is at the top end of the area that I am in as well as the additional $50 for every Schedule E added to the return. I wish I could charge more.

Matt

[Unregistered]

Matt

Maybe we can work out some outsourcing where I send you my clients Income Statement and Balance Sheet and you produce a return for me. Then I can mark it up 20% and make a few bucks. Ha, just kidding you guys. I wouldn't never do that. But, I do think that $500 for an LLC with clean books where you do basically data entry is a reasonable price, but how many of those do you really get a year?

[Bees Knees]

Ready, set, GO!

Is this the same argument that says you don't have to file a partnership return for a partnership because it's easier to just pretend the partnership doesn't exist and file two Schedule C's? I'm afraid it is.

I'm calling "Rudolf!"

You have an LLC with three members. If there was no election filed to be taxed as a corporation, the entity is taxed as a partnership for federal tax purposes. Unless we want to pretend that the partnership doesn't exist.

TTB, page 20-2 "Co-ownership of property maintained and rented or leased is not a partnership unless the co-owners provide services to the tenants.

[Bees Knees]

Pub 17, "Part Interest" is talking about a "Part Owner" of rental real estate. These individuals in this post do not own real estate... they own a LLC taxed as a partnership (that just happens to own some real estate).

Irrelevant. The only requirement for investing groups to elect out of subchapter K is that they be unincorporated and not provide services. Unless you want to argue that an LLC is treated as a corporation for purposes of Regulation Section 1.761-2.

[Armando Beaujolais]

TTB, page 20-2 "Co-ownership of property maintained and rented or leased is not a partnership unless the co-owners provide services to the tenants.

Old Jack is right. There are not "co-owners." There is one owner.

Dangerous territory to ignore an LLC and pretend it doesn't exist. I wonder why the LLC was set up in the first place. "Let's pretend it exists for liability protection, but pretend it doesn't exist for tax purposes."

I call a Rudolf.

[OldJack]

TTB, page 20-2 "Co-ownership of property maintained and rented or leased is not a partnership unless the co-owners provide services to the tenants.

If the title of the real estate is in the names of the partners rather than a separate legal entity such as an LLC you might qualify as "co-ownership".

[geekgirldany]

Old Jack is right. There are not "co-owners." There is one owner.

Dangerous territory to ignore an LLC and pretend it doesn't exist. I wonder why the LLC was set up in the first place. "Let's pretend it exists for liability protection, but pretend it doesn't exist for tax purposes."

I call a Rudolf.

I don't know why an LLC was setup. He had a business before that was an LLC. I wish they would have discussed it with me before the setup. But I have seen this happen more and more with people setting up corporations. Don't ask me... the one who can advise you weather you should or not... just go and do it and let me figure it out later.

[Bees Knees]

Old Jack is right. There are not "co-owners." There is one owner.

Really? A partnership is not a group of co-owners? I didn't know that. Thanks for the clarification.

BTW, what does it mean, then, when Code Section 761(a) defines a partnership as a joint venture? If by your definition, a partnership that owns property is not considered the co-ownership of property, then how can a partnership be considered a joint venture?

[Bees Knees]

If the title of the real estate is in the names of the partners rather than a separate legal entity such as an LLC you might qualify as "co-ownership".

So by that logic, when investing groups pool their funds so that they buy and sell stock as a group under the group name, then they shouldn't be allowed to elect out of partnership treatment.

[geekgirldany]

Okay, bringin this old thread back to life.

Getting ready to finish up doing the taxes for this client. I told them to make him the only member. I then find out that they did a quick claim deed to put the land into the LLC name. Oh they also got a Fed ID number. Faxed me the letter today and it says at the bottom they have to file a 1065 based on the information provided.

So now the IRS will be looking for a 1065.

For argument sake if a 1065 has to be filed. How are expenses paid by the partner deducted? Is there a way he can deduct them off the K-1/Schedule E?

[Gretel]

Expenses can be deducted on the 1040 Sch. E pg. 2 only if operating agreement says so. Something like: Partners are expected to pay for .... and no reimbursement is available through partnership.

[geekgirldany]

Thanks Gabrielle!