TAXES: where to deduct yellow letter costs, monthly service expenses on personal 1040?

[Curt Smith]

Hi Everyone,

I don't file a business tax return for our LLC because it's a tax non-entity (pass through). If I did this would not be a question. As it is our rental business is falling onto our personal 1040..

As real estate business operators we probably have 2-5 pay by the month services, $29/mo on up.

We do yellow letter mailings, buy lists etc. This to me are expenses of running the over all real estate business and not an expense in running each rental. Maybe an expense in buying the properties bought that year. We only do buy-fix-rent, never flip. So these expenses would have to be a part of ?? the acquisition cost?

Maybe the agents out there who don't have a type S corp can share where you put business expenses when you don't file Sched C (business). Even if one does file sched C alot of expenses aren;'t deductable unless the business has income. Our rental income is on Sched E (rental / royalty).

Just curious, Curt

PS I don't want to hijack this thread with why I do my own taxes but I have reasonable reasons why. :)

[Curt Smith]

Best answer I've heard when you don't file a reporting return from a multimember LLC, where business expenses would be handled in the LLC (non-entity without S type declaration) filing a reporting return 1065 would (I'm believing) handle business wide expenses that are general across all properties like marketing, laptops, cell service etc.

But without a partnership return, all rentals showing up on your personal 1040 sched Es, the best I've heard and DO, is add up all the business expenses, marketing expenses, education, REIA dues (and milage driving to the REIA meetings) etc etc and divide by the number of houses and put that as an expense on EACH house called "business operations expense".

I don;t like this solution but it's what I do and what I've heard others do.  I'm open to a better tactic.