4 TP's own rental but no K-1 issued

[AZ-Tax]

4 people own rental as of 2014. Tenant issues 1099-misc to each owner under owners SS#. Except for my client who filed an ext, remaining 3 filed a form 1040 w/Sch E. No K-1 was issued to my client nor 2 other owners and my client does not believe a form 1065 was filed. It seems last owner is not communicating very well with the other 3 which includes my client. Will IRS mail each owner/TP instructing TP to file a form 1065? If not, will the IRS allow these 4 to continue to file individually? It seems last owner is not communicating very well with the other 3 which includes my client.

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Partnerships

[kathyc2]

4 people own rental as of 2014. Tenant issues 1099-misc to each owner under owners SS#. Except for my client who filed an ext, remaining 3 filed a form 1040 w/Sch E. No K-1 was issued to my client nor 2 other owners and my client does not believe a form 1065 was filed. It seems last owner is not communicating very well with the other 3 which includes my client. Will IRS mail each owner/TP instructing TP to file a form 1065? If not, will the IRS allow these 4 to continue to file individually? It seems last owner is not communicating very well with the other 3 which includes my client.

http://www.irs.gov/Businesses/Small-...d/Partnerships

How is the rental property titled? Is it held in the name of partnership or LLC or as fractional interests of the 4 people?

[AZ-Tax]

Rental if titled in the individuals/TP's names

How is the rental property titled? Is it held in the name of partnership or LLC or as fractional interests of the 4 people?

The rental is titled in the individuals/TP's names. No LLC.

[kathyc2]

The rental is titled in the individuals/TP's names. No LLC.

IMO, the correct way to handle it is each person reports their share of income/expenses on Schedule E page 1.

[ATSMAN]

The rental is titled in the individuals/TP's names. No LLC.

What name shows up on the rent receipts? Are 4 receipts issued for a month's rent with 25% of the rent in each?

This is not a partnership or LLC in my opinion and you would need to do a Sch E with 25% of the income, and expenses for your client.

[kathyc2]

A heads up if there is a mortgage. The 1098 will only show one TP SSN. If your client is not the one shown on 1098, put his share of interest expense on line 13 rather than 12. IRS does a match between line 12 and 1098's and if one doesn't show up, he will be receiving a notice.

[AZ-Tax]

Receipt issued to each owner @ 25% of mo gross rent.

What name shows up on the rent receipts? Are 4 receipts issued for a month's rent with 25% of the rent in each?

This is not a partnership or LLC in my opinion and you would need to do a Sch E with 25% of the income, and expenses for your client.

Receipt issued to each owner @ 25% of mo gross rent.

[AZ-Tax]

No mortgage

A heads up if there is a mortgage. The 1098 will only show one TP SSN. If your client is not the one shown on 1098, put his share of interest expense on line 13 rather than 12. IRS does a match between line 12 and 1098's and if one doesn't show up, he will be receiving a notice.

No mortgage

[ATSMAN]

A heads up if there is a mortgage. The 1098 will only show one TP SSN. If your client is not the one shown on 1098, put his share of interest expense on line 13 rather than 12. IRS does a match between line 12 and 1098's and if one doesn't show up, he will be receiving a notice.

Very good point. I had made that mistake myself once and taxpayer got the IRS notice a year later. Took care of it with one letter but that is something to keep in mind!

[ATSMAN]

Receipt issued to each owner @ 25% of mo gross rent.

Then you are good to go. Perhaps you can get the other 3 as your clients too.

Who was preparing the k1s in previous years and who was filing those returns?

[AZ-Tax]

The previous owner occupied the property as their residence

Then you are good to go. Perhaps you can get the other 3 as your clients too.

Who was preparing the k1s in previous years and who was filing those returns?

The previous owner occupied the property as their residence.

[Burke]

Usually in these cases, one person handles the payment of expenses and deposits the rents. It is unlikely the tenant is writing four checks a month for the rent. So that person is the one who needs to furnish the information to the other 3 in order to complete the tax return. Request it in writing. And who is the tenant making that check payable to? If the other 3 are filing Schedule E's, then they have the info for depreciation, etc. (Hopefully.) Also if one person is collecting the rent, of which 1/4 legally belongs to your client, then there is an obligation there to provide him with the necessary information to file the return. Don't accept "not communicating." Perhaps an official letter from you can get things moving. And get a copy of the depreciation schedule they are using.

[ATSMAN]

Usually in these cases, one person handles the payment of expenses and deposits the rents. It is unlikely the tenant is writing four checks a month for the rent. So that person is the one who needs to furnish the information to the other 3 in order to complete the tax return. Request it in writing. And who is the tenant making that check payable to? If the other 3 are filing Schedule E's, then they have the info for depreciation, etc. (Hopefully.) Also if one person is collecting the rent, of which 1/4 legally belongs to your client, then there is an obligation there to provide him with the necessary information to file the return. Don't accept "not communicating." Perhaps an official letter from you can get things moving. And get a copy of the depreciation schedule they are using.

>> Don't accept "not communicating."

That is a red flag! You are going to run into other issues later on.

I have a residential rental owned by 3 siblings and they are constantly bickering. The son says the sisters want the rent money but he is doing all the work! And every year I hear about this "not communicating" excuse when I need the information. I now demand an e-mail with the information. No verbals because it changes too frequently.