Filing taxes for an LLC

Member since 2024 · 1 post · 2 votes

We just created our LLC back in November of 2024. Do we claim taxes for all 12 months of 2024 or just November and December for our rental properties?

Thanks!

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Kaden Blackstock
Developer · Gulf Breeze FL, United States · Member since 2023 · 3 posts · 2 votes
1y
It depends on how you set up your LLC. I'd recommend getting professional advice on what would be in your best interest.

For my LLC as an individual, my LLC taxes are done in conjunction with my person tax return, so I only filed one return.

If you're trying to deduct expenses and such, I’d only do so from the start date of your business and forward.

You may be able to write off items period to that but I'd consult with a tax expert.
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Bill HamptonBusiness Member
Accredited Investment Fiduciary, AIF®, Financial Planner, Tax Strategist, Real Estate Investor · Atlanta, GA · Member since 2012 · 2k+ posts · 978 votes
1y
@Fabian Escobar

You have to report all income and expenses for the year. Where they are reported and what expenses can be deducted will depend on various factors. I recommend that you hire a real estate tax accountant.
Bigger Pockets is a great place to find an accountant specializing in real estate taxation.

A good real estate accountant can save you thousands of dollars by leveraging entity selection and formation, tax deductions, cost segregations, bonus depreciation and tax planning.

I recommend finding an accountant specializing in real estate taxation, business taxation, financial planning and tax planning.

Consider working with your accountant remotely to expand your options.

I would also recommend looking for an accountant willing to work with you throughout the year. You want an accountant who can help you strategize and who is responsive when you want to know the consequences of the financial decisions you are making throughout the year.

Good luck.
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Josh St LaurentBusiness Member
Financial Advisor · Stateline, NV · Member since 2023 · 131 posts · 122 votes
1y
It depends on what "we" means! Your LLC can be treated in different ways, if your partnership is a married couple it could be treated differently than two unrelated business partners!
Shoot me a DM and I'll get you the email to a great tax planner Joshua Thompson that works with RE investors and can help you get to the bottom of it.
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Natalie KolodijBusiness Member
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Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes
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Who is "We" ?

If you created a 2 person LLC you created a partnership 1065 filing (most likely). And those are filed separately on form 1065 and are actually due today.

If it is a single member LLC (owned by one person or if the partners are you and your spouse and you're based in a community property state) the rentals would still be reported on your schedule E on your 1040.

Additionally; when did you transfer ownership of the rentals into the LLC?
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Jason MalabuteBusiness Member
Accountant · Los Angeles, CA · Member since 2016 · 2k+ posts · 906 votes
1y
I want to clarify that I don't fully understand the question, but here's a general guideline. Since the LLC was set up in 2024, you would need to file taxes for the entire year of 2024, regardless of the November formation date. However, you only report the income and expenses for the months in which the LLC had activity.

If your rental properties only had income and expenses in November and December under the LLC, then you would only report those two months. However, if the property had income and expenses for all of 2024, then it depends on when the property was transferred into the LLC.

• If the property was transferred into the LLC in November 2024, then income and expenses before November would typically be reported on your personal Schedule E, and only November and December would be reported under the LLC.

• If the property wasn't transferred to the LLC until 2025, then none of the 2024 income and expenses should be reported under the LLC.

So ultimately, the key factor here is: when was the property officially transferred to the LLC? That determines how you allocate income and expenses. As others have mentioned, how the LLC was set up also plays a role, so consulting a tax professional is always a good idea.
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Fulton Abraham Sanchez
CPA| New Clients Welcome| 50 States · Member since 2016 · 440 posts · 94 votes
1y
You'll report rental income & expenses only for November & December 2024 since your LLC was formed then. Need help? you've come to the right place. There are over 20 active CPAs here in Biggerpockets assisting RE investors with their tax planning. Make sure to reach out to one with real estate experience. Please email them as we are not allow to self promote.

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Ashish AcharyaBusiness Member
CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
1y
@Fabian Escobar You only report income and expenses from November and December 2024, since that's when your LLC was formed. Any rental income or expenses from before November should be reported on your personal tax return (Schedule E) if the properties were owned in your name.

For tax filing:
- Single-Member LLC (SMLLC) – You'll report LLC activity on Schedule E of your 1040, just like before.
- Multi-Member LLC – You'll file Form 1065 (Partnership Tax Return) and issue K-1s to each member.
- If you elected S-Corp taxation, you’ll need Form 1120-S.
Be sure to keep separate records for pre-LLC and post-LLC transactions to avoid mix-ups. A real estate CPA can ensure a smooth transition and help you maximize deductions.
This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.
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