How are LLCs taxed?

[Pat Bruton]

I am leasing a property that is in my name to an LLC who will then be subleasing the property out as a furnished short-term rental. I know that landlords don't pay self employment taxes, anyone know if an LLC that subleases gets the same tax treatment? Planning on filing the LLC under IRS code "531110 - Lessors of Residential Buildings & Dwellings (including equity REITs)" as the business activity if that helps. I know I need a CPA for specifics, but seeing if anyone knows the tax treatment for sublessors before I dive too deep. Thanks a lot for your help BP! -Patrick

[Brandon Hall]

@Pat Bruton actually landlords can and do pay self employment tax. Look up an article I wrote last year about short term rentals. When your average stay is less than 7 days, you no longer have passive rentals income. Instead, you have earned business income.

If this is the case, you'll be reporting on schedule C and your earnings will be subject to SE taxes.

Consult with a CPA. Hope this helped.