Level 6

LLC created to for rental property but LLC doesn't own the properties

Forum|Forum|1 year ago
February 9, 2025
2 replies
13 views

Hi, client has one rental property and created an LLC with address of the property, but the property itself is under his personal name. LLC is in CA and will need to file form 568. Am I correct, that unless the LLC owns the property than rental income/expenses shouldn't go on the LLC return? Do I file it with just $0?

Tax Talk

Level 15

If the LLC is disregarded for tax purposes it all goes on the 1040 Schedule E of the owner so it doesn't matter.

But CA still wants its $800 for the LLC. And I guess the 568 shows -0- revenue.

The more I know the more I don’t know.

Level 15

"and created an LLC with address of the property,"

If it is multiple partners, you should ask if they executed a lease. A lot of people seem to be running Air B&B out of leased properties.

Or, perhaps he thought naming the LLC for the address was good enough? Bad guidance and entity formation seem to go hand-in-hand.

Don't yell at us; we're volunteers

Level 6

Husband and wife are the LLC members. They jointly own the property in their personal names. No lease agreement.

Level 15

Did you ask why they didn't transfer the property to the LLC?

Won't help the past.

And maybe they should just kill the LLC.

The more I know the more I don’t know.