Since the rental property is owned personally, do I deprecate on Sch E on 1040 with rental income = expense with a note explaining that all rental income is being reported through LLC Form 1065. Except for showing depreciation expense on the 1040 since it is owned personally ? This is a married couple with LLC which requires the Form 1065 to be filed. The LLC tracks all income/expense...just didn't know how to handle listing the asset and depreciating since it is owned personally.
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This is just my opinion and is it possible the proper handling could vary depending on State laws, but ...
If they have paperwork showing that for tax purposes they contributed the property to the LLC, then everything goes on the 1065. Nothing on page 1 of Schedule E.
If they don't have paperwork showing that for tax purposes they contributed the property to the LLC, then everything goes on page 1 of Schedule E. Nothing on the 1065.
As a side note, WHY do they have a LLC? It seems likely that any legal protections of an LLC would be voided if the property is titled in their personal names. -
I think it had something to do with the loan on the property. They still own the property personally so nothing showing that they are contributing the property to the LLC for tax pursposes. At least at this stage.
Thanks...
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