I have a 2 member LLC taxed as a partnership. The 2 members live in Ohio but started a business in AZ. The members purchased a house "personally" in AZ and want to rent it to the partnership in place of paying hotel bills when they travel to AZ for business. My question is would payments to the members be considered quarantee payments or rental expense? Are there any specific tax issues or limitations regarding LLC renting real property from members? Any advise or referrence would be helpful. Thanks.
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14 days
Karen, I'm not the most knowledgeable source, but it appears that you they may have a problem with exceeding 14 days rental to a related party.
And of course the whole issue can be scuttled if there is no other rental income whatsoever from 3rd parties.
Guaranteed payments to partners? I don't think so because none of the travel is guaranteed to occur...
But what do I know? Not a lot. I just wanted someone to answer your post and hope you will get answers from others who know more than me. I notice this is your first post, and want to welcome you to the board. Come back often.
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