Posted by Michael on February 01, 2005 at 17:32:42:
As much as I like software, I’d love to understand how it works.
Schedule K - Posted by Michael
Posted by Michael on February 01, 2005 at 10:22:06:
Hi,
I’ve got an LLC which is basically managing the rentals I own. My wife and I are both members of the LLC. The LLC is collecting rent and paying the note on the properties (along with a few other expenses related to office, etc). The question I have is what should the schedule K look like? Does the LLC expense the interest or does it account for the mortgage payment differently. It’s really a stupid issue because, regardless, the income and expenses flow through to my wife and I, but the government has said that spouses do not constitute a “single-entity LLC”. I just want to get the ducks in a row.
Thanks!
Re: Schedule K - Posted by John K Haslach, CPA, MST
Posted by John K Haslach, CPA, MST on February 02, 2005 at 16:47:36:
If the LLC has rental income, the income/expense is reported on Form 8825. If the LLC holds the note, it deducts the mortgage interest on Form 8825. The principal is not deductible. You really should spend a couple bucks and get some advice from a CPA who is comfortable with the area. You may be missing some very important tax benefits/ideas.
Re: Schedule K - Posted by chet
Posted by chet on February 01, 2005 at 14:00:05:
I use turbo tax 1065 which build k-1 automatically.