Posted by Simbob on October 31, 2000 at 09:39:02:
…aren’t limited to a charging order, they can sieze your entire interest in the LLC, thereby compromising asset protection. A two (or more) member LLC can vote to limit distributions to a judgement creditor with a charging order, therby increasing asset protection.
This asset protection angle is unrelated to tax filing.
That’s my non-lawyer understanding.
Reporting LLC rentals on Schedule E or K1? - Posted by HR
Posted by HR on October 31, 2000 at 07:15:54:
Hey folks,
I have been placing my rental properties in their own LLCs, using my ss# as the tax id #, and reporting them on schedule E of my 1040. Recently, a very experienced local investor told me he files separate returns for his llcs (1065, I think?) and then reports just the bottom line as K1 distributions on his 1040. While it is some extra accounting paperwork (and expense for my accountant to do it), he believes it limits his chances of being audited by the IRS since, if they do audit his 1040 tax return, they just get the bottom line numbers and not the full scenario (like they do on my schedule e). He contends they would have to audit his LLCs as well, which he says is unlikely.
Any thoughts?
Thanks in advance! And Happy Halloween.
HR
Re: Reporting LLC rentals on Schedule E or K1? - Posted by JHyre in Ohio
Posted by JHyre in Ohio on October 31, 2000 at 08:48:42:
If single-mamber LLC, on Schedule E;
If only Members are you & spouse, take your choice (insignificant difference in audit outcome);
If 2+ non-spouse Members, K-1.
John Hyre
Re: Reporting LLC rentals on Schedule E or K1? - Posted by Jude
Posted by Jude on October 31, 2000 at 09:04:30:
If you have a single member LLC using your personal tax# and(pass thru) to your schedule E, does this lose your asset protection? I remember reading in a previous post that by using this approach you lose the your liabiliy protection?
Jude