Single member LLC (disregarded entity) rents storage units - alot of them. Couple of questions: 1. Is rental income and expenses still reported on Sch E.? 2. Net profit would not be subject to SE tax? 3. He got a Federal EIN which he will not need as there are no employees - does it need to appear on his tax return any place? 4. I gather there would be no need for Sch C understand these circumstances? Any thing else I am missing? Thank you much.
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Yep
Yep, no, no, no, no. (We're talkin real estate, right? Not cargo containers or bus lockers or hard drives?) -
What If
Thank you Jainen. If in the future he added an employee, would the wages be reported on Sch C?Comment
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sole proprietorship
>>would the wages be reported on Sch C?<<
Yes, I think they would. Only a trade or business can have employees, so hiring an assistant would convert the passive rental activity into a sole proprietorship.Comment
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Sole
Then if he had an employee, not only wages but income and expenses would go to Sch C.Comment
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If only a trade or business can have employees, what about the nanny tax? There are alot of rules for employee status, but being in a trade or business is not one of them. There are also alot of rules for passive activities, and hiring an employee is not one of those either.Originally posted by jainen
If you own some rental real estate and hire someone to perform services for you, and those services fall into the category of the person being an employee, does that automatically mean you're a trade or business? I don't think so.Comment
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Wages
Well then would the wages go on Sch E under Other with a description of wages?Comment
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