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Level 3
March 5, 2020
Question

Expense reporting on Form 1065 vs Form 8825

  • March 5, 2020
  • 1 reply
  • 17 views

An LLC holds several rental properties, should the state LLC fees and franchise tax expense be allocated among properties on Form 8825? Or report it as ordinary expense on page 1 of Form 1065?  Same question applies to accounting and professional fees for preparing LLC tax return.

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1 reply

PhoebeRoberts
Intuit Community Champion
March 5, 2020

I've seen it done both ways. Matter of personal preference.

sumluckAuthor
Level 3
March 6, 2020

Thank you for your reply.  Expenses reported on page 1 of 1065 is considered ordinary expense while reporting on Form 8825 is considered as Net rental real estate income/expense.  Ordinary income/expense maybe treated as self-employment income while rental income/expense may not. 

Level 2
March 6, 2020

If you are referring to CA franchise tax expense it is not deductible on the state return.  So it is easiest to track by entering directly on the 1065.