Filing taxes on new property purchased in an LLC

4 Replies

My wife and I have held a property in an LLC for many years. I do my taxes online and include the LLC with our personal taxes (married filing jointly) since we are the only managing members. In 2018 we purchased 2 more properties into the existing LLC. We purchased them as cash and transferred the money into the LLC from our personal account to pay for the properties and legal expenses. My question is how do I handle the money. Is it reported as income for the LLC ?

HI Dominic....

If you and your wife are both on that LLC and you're in CT which isn't a community property state that LLC needs to be reporting a partnership return form 1065.

The answer on treatment of cash is going to be different because cash transfer into a partnership (which is what this should be) is different than a disregarded entity which seems like how you're reporting it

I'd look into talking with a tax pro

Thanks Natalie. Looks like I have to straighten this out. When the LLC was formed the IRS help line told me I could file it with my 1040. That's what I get for trusting the IRS.

@Dominic R. congrats on having multiple LLC's. 99.9% of the time, a tax professional will save your 10 times their fee by knowing all of this. Not to say you aren't a bright guy who understands all the tax code. A good CPA will always save you money, keep you above board, and is required to be on top of all the rules and regs that guys like you and I may not have the time to delve into. My $.02.