Multiple rentals

[JenMO]

Client formed LLC (ptshp) purchased a dozen rentals and has a manager take care of collecting rent and maintenance. Billing is not always specific to a property. Can the rents and expenses be grouped together as one rental? Deprec on each house would be listed separately. Houses were purchased in a group originally, but each had a separate price. Are there any others out there that have had this problem/experience? and how is the best way to handle?

[kpangelinan]

Client formed LLC (ptshp) purchased a dozen rentals and has a manager take care of collecting rent and maintenance. Billing is not always specific to a property. Can the rents and expenses be grouped together as one rental? Deprec on each house would be listed separately. Houses were purchased in a group originally, but each had a separate price. Are there any others out there that have had this problem/experience? and how is the best way to handle?

Most of my clients and even those who are not that have other accountants, have multiple LLC's for different properties with each deeded to that particular LLC.

I guess I would first ask if all of the properties are deeded to the LLC or not?

[JenMO]

Yes, the properties are all deeded to the LLC taxed as a partnership. 2 partners.

[Gretel]

Client formed LLC (ptshp) purchased a dozen rentals and has a manager take care of collecting rent and maintenance. Billing is not always specific to a property. Can the rents and expenses be grouped together as one rental? Deprec on each house would be listed separately. Houses were purchased in a group originally, but each had a separate price. Are there any others out there that have had this problem/experience? and how is the best way to handle?

There is a grouping election out there, mainly to qualify someone as a Real Estate Professional. The downside is that even if one property is sold, possible passive losses can not be taken. That's very simply put. There is a lot more to it.

I am not sure that this would help your situation, since I don't think this would avoid having to account for income and expenses separately.

Are these houses all in one spot?

[JenMO]

No, various small towns. This is an investment.

[JenMO]

Manager gives an invoice for work done, specifies some individual rentals, but purchases items to be used in various rentals at times, like bug spray, collection fees, etc. I'm not sure how to divide them out. Lumping together would be the easiest, but correct?
Client also purchased note on house, client is paying interest on that note, does that interest go on the front of the 1065 as an expenses, or is it classified as investment interest and put on k-1 to carry over to indivd? Any material to read would be helpful, too

[Gretel]

Here is what I would do:

Have manager specify expenses as good as he can, prorate anything else: It's not big numbers anyway, is it?

All income and expenses need to be reported on forms 8825 (don't hold me to the exact form number) including mortgage interest, prorated, each property separate.

[DaveO]

I have a couple of people with a bunch of rentals. Insurance, taxes, interest and major repairs and improvements are kept seperate. Misc supplies and some maintenance like lawn mowing and pest control is done by a service that bills in a lump sum. These expenses I prorate with a spreadsheet. The election to group them does have some complications.

[joanmcq]

The election to group has a lot of complications, especially that pesky inability to recognize losses until they are all sold, and the fact that the election can't be revoked.

[JON]

Somebody

has a rent roll. How would you know who has paid and who has not???

[JenMO]

Thanks for the input. Sometimes the easiest isn't the right way.