Report real estate property investment for business

Forum|Forum|3 years ago
June 1, 2023
2 replies
11 views

Hi,

I have a case:

1. A two member LLC purchased a small dental office at $200k end of 2021.

Filed 1065 for the LLC, report it on balance sheet as other investment asset.

2. Durning 2022 $50k spent to remodel, but not sold at end of 2022. Occured operating expense (HOA fee, property tax, etc.). Should the operating expense & $50k remodel added to the cost? Then still report on balance sheet under investmetn asset for 2022?

what if the property sold in 2023? Or what if the unit rented in 2023?

Thanks!

ProConnect Tax

This topic has been closed for replies.

qbteachmt

Level 15

"what if the property sold in 2023? Or what if the unit rented in 2023?"

Two questions need to be asked of them: Are you buying and fixing to flip (investment)? Or, buying and fixing to operate (asset)?

In other words, are they dentists, are they builders, is this inventory to sell off or is this going to be part of their activities (owned and operated, even if as a landlord)?

Don't yell at us; we're volunteers

BobKamman

Level 15

Sometimes getting the facts here is like pulling teeth. When you say "dental office," does that mean just the real estate, and nothing is happening inside it so no one is paying rent? Or do you mean a dental practice -- lock, stock, barrel, dentists and hygienists and sterilizers -- which are being bought up by non-dentists who then try to extract as much profit from the operation as possible?