rental properties in an LLC

[Possi]

If my client puts his rental properties in an LLC, do I have to do anything different for his tax return? I think it is filed the same way, Sch E, since he is a single owner, right?

He is a Dr and has several rentals. I'm sure he is just doing this for liability control.

[Roberts]

Yes, you can just file a Schedule E.

[Gretel]

Yes, if this is a single-member LLC tax reporting does not change unless client elects otherwise.

[kpangelinan]

Yup, agree with the other posts....I'll add that if he hasn't already, to open a corporate checking account in the LLC's name and have the tenants pay to the order of the LLC and if it's cash, just deposit cash in the corporate account. It's one of the issues that have pierced the corporate veil in past lawsuits.

[Possi]

checking

Even if it is a single owner, he should open a separate checking account for it? If it's not being taxed as a corp, is it necessary?

[AZ-Tax]

Open up separate checking acct

Even if it is a single owner, he should open a separate checking account for it? If it's not being taxed as a corp, is it necessary?

Agree with Possi, open a checking acct in LLC's name. Also, have the TP issue you (Tax Preparer) a check from the LLC acct for tax prep just to prepare that Schedule E(s) and depending on the TP's AGI, it could either be fully tax deductible, partially tax deductible (remaining suspended) or suspended.

I have a client who has 10 rentals and that is what he does.

[Roberts]

I would open a checking account also. Bankrate.com will show you the free checking options in your neighborhood. Having a checking account for the business and NOT co-mingling funds is a great idea. This keeps the accounting FAR easier if they can run everything through a business.

If it's in the name of an LLC and they don't have a checking account for the LLC, who exactly are the renters making their rent checks out to?

[Gretel]

Definitively agree with the separate checking account. Corporation or not doesn't matter, the same principle applies of getting to the personal assets of the member of the LLC. If you don't act like a separate entity why be a LLC in the first place?

[ddoshan]

If my client puts his rental properties in an LLC, do I have to do anything different for his tax return? I think it is filed the same way, Sch E, since he is a single owner, right?

He is a Dr and has several rentals. I'm sure he is just doing this for liability control.

As long as he has not incorporated. Which is a very bad idea for rental properties as I understand it.