I've recently acquired a retired customer. He and his brother in law are 50/50 owners of a (WI) LLC they began about 8 years ago to hold land that was purchased for investment purposes. No employees. The only income ever generated by the LLC has been the small land rental amounts from the two prior years. They may have the land logged in 2018 though - possibly creating significant income. The ordinary business losses of prior years were apparently generated through depreciation of a mower and certain other equipment - some of it was sold in 2016 per the 1231 gain.
the LLC K-1's (per owner) for the past 3 years show : 2016 2015 2014
1. ordinary business income ( 490 ) ( 510 ) ( 714 )
2. net rental income 210 210
10. net sec 1231 gain 114
14. self employment earnings ( 490 ) ( 510 ) ( 714 )
An ordinary income loss amount has apparently been shown on the K-1 every year since inception of the LLC. Should the ordinary business loss shown on line # 1 of the K-1 be used as an allowable schedule "E" loss & transfer to line # 17 of the 1040 ? Or should these ordinary business losses be suspended on form 8582 - net of any 1231 gain & rental income - until the land is sold & the LLC dissolved ? Or something else ? Thanks for your comments
the LLC K-1's (per owner) for the past 3 years show : 2016 2015 2014
1. ordinary business income ( 490 ) ( 510 ) ( 714 )
2. net rental income 210 210
10. net sec 1231 gain 114
14. self employment earnings ( 490 ) ( 510 ) ( 714 )
An ordinary income loss amount has apparently been shown on the K-1 every year since inception of the LLC. Should the ordinary business loss shown on line # 1 of the K-1 be used as an allowable schedule "E" loss & transfer to line # 17 of the 1040 ? Or should these ordinary business losses be suspended on form 8582 - net of any 1231 gain & rental income - until the land is sold & the LLC dissolved ? Or something else ? Thanks for your comments
Comment