I will try to keep it short, any input would be greatly appreciated.
I own 1 rental property with a partner. We started an LLC and filed an SS-4 to obtain an EIN in order to open a business bank account so we could have a neutral business bank account to accept rent and pay the mortgage and other expenses. When initially getting the loan on the house, we simply both were co-signers on the loan - i.e. obtained a personal conventional loan. We have not put the deed to the house in the LLC. At the end of the last tax year, it was brought to our attention that since the loan is under our own personal social security numbers and the business income/expenses and tax return is filed under the EIN, we have a disconnect so to speak that we need to correct. Does anyone have any advice on how to proceed? We have considered dissolving the LLC, but I am unsure of the tax implications. Does anyone have any insight as to the implications? Do we need to refinance to a commercial loan? Is refinancing from a conventional loan to commercial loan possible?
Talk to a CPA. If you don't have one, get one. They will likely save you more than they charge you, and doing taxes becomes much less of a headache.
With an LLC you can typically choose whether it is taxed as a separate entity or as a pass-through entity. If you elected to have it be a separate entity, yes you have a disconnect.
All the LLCs I own wholly or in part are pass-through entities so everything ends up on my taxes and there is no disconnect. Typically, the LLC would create a form K1 which basically shows how much profit or loss flows from the LLC to you. Your CPA should produce this for you.
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