Can you "pay" an onsite prop manager in reduced monthly rent?
Hey Guys,
I am a co-owner/manager of an LLC that owns and operates investment properties in California. I also manage the properties while living in one of the units.
I currently receive a property management fee which ends up being a 1099 at the end of the year for taxes. This means I get taxed on that income and the LLC gets to use my property management fee it as an expense.
My question is, can I just reduce my monthly rent instead of receiving a monthly property management fee? This will lower the taxable income on the properties a bit, and it would technically not be income for me.
Not too sure if this is even allowed by the IRS, but wanted to check to see!
Thanks