Horse boarding biz in LLC

[taxmandan]

I have a new client who offers horse boarding and lessons on her small farm. Previous preparer put everything on Sch F, but I'm thinking the boarding belongs on the Sch K as Non-real estate rental and the lessons are income for her that is subject to SE since this is a service provided personally by her. This LLC has two owners so it's not a disregarded entity. Is the Sch F correct? How do you who have this type of farm client handle it?

Thanks,

Daniel

[Bird Legs]

Llc

This sounds like a partnership. Has the LLC made an election to be taxed as a partnership, Corp.?

[veritas]

Who feeds and waters the horses? I have to assume thtat would be your clients. This would be income from a business subject to self employment tax. The LLC is a partnership unless they elected to be taxed as a corporation.

[Donanita]

Previous Sch F

Did the previous preparer know about the LLC or did the client file for a LLC after the tax return was filed. Had a client in the past that boarded horses and I filed a Sch F as the client did not say they were a LLC.The next year they went to another preparer and told them they were a LLC.Just wondering.Last years may have qualified for a Sch F

[taxmandan]

Horses

They are a bona fide LLC, file as a partnership. My concern was whether some of the "boarding" fees should be considered rent rather than farming activity. She doesn't really "farm" anything, doesn't grow crops, or raise animals so I wondered if the Sch F might be the wrong form. Anyway, it doesn't really affect the bottom line, just mean changing the numbers from line 1 to line 3b of the K-1. Thanks for your responses, will probably continue with the Sch F since it has been used on all previous returns.

[Bees Knees]

I would have a hard time believing there isn’t a certain amount of services provided by the LLC in connection with the boarding operation. Boarding animals is a high maintenance activity. There are all kinds of situations where the person who owns the animal cannot be there 24 hours a day to take care of every detail. I would say leave the activity on Schedule F.