MFJ Couple with LLC Filing a 1065 for years. Can they switch to reporting on Schedule E?

Forum|Forum|2 years ago
February 10, 2024
2 replies
15 views

Hello Community!

I have a married couple that formed a LLC for a commercial rental property.

They have been filing a 1065 since inception (50/50 ownership with husband and wife).

Can they eliminate the 1065 filing and report the income and expense on Schedule E and eliminate this additional expense under the single member LLC filing rules?

I would like to save them the expense of tax preparation if possible.

Thank you!

ProSeries Professional

This topic has been closed for replies.

Just-Lisa-Now-

Intuit Community Champion

Do they live in a community property state?

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

C

cpazottAuthor

Level 3

No, this client and their rental is in Michigan. Michigan is NOT a community property state.

T

Terry53029

Intuit Community Champion

Is the property titled in the LLC name, or husband, or wife only, or in both names? In a non community property state they cannot file a schedule E If the property is titled in the name of the LLC, as the IRS considers the LLC a separate entity, and must file a 1065 if LLC is owned by husband, and wife. They can dissolve the LLC, put the property in both their names then file a schedule E on a joint return. Note only a husband wife owners of rental property can do that. If two unmarried people own a rental then 1065 or some other entity.

C

cpazottAuthor

Level 3

The property is titled in the name of the LLC.

I believe this answers the question. Thank you!

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