Bookkeeping/Taxes at the Parent company level

Tax, SDIRAs & Cost Segregation
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Bookkeeping/Taxes at the Parent company level

Max Brudner
Member since 2021 · 7 posts · 2 votes

Hey all, brand new one here - first post! I've been reading a lot, but can't find the answer to my question. I have two rental properties, building two new ones right now, and have four more lots on which I plan to build either SFRs or 4-plexes. Either way, my portfolio will be growing this year. I'm looking to keep 1-2 residences per LLC to minimize risk - so this will require me to have multiple LLCs. Unfortunately, that makes it extremely difficult for bookkeeping. I use QB Desktop and track my properties using Classes, but I don't want to have to jump between many separate QB companies to maintain my books. I have a parent company and my LLCs are members of that parent company. My question is - can I maintain all records and books and file taxes at the parent company level and treat my individual LLCs are disregarded entities?

Thank you,

Max

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Gita FaustBusiness Member
Accountant · Richboro - Philadelphia, PA · Member since 2008 · 901 posts · 246 votes
4y
Quote from @Max Brudner:

Hey all, brand new one here - first post! I've been reading a lot, but can't find the answer to my question. I have two rental properties, building two new ones right now, and have four more lots on which I plan to build either SFRs or 4-plexes. Either way, my portfolio will be growing this year. I'm looking to keep 1-2 residences per LLC to minimize risk - so this will require me to have multiple LLCs. Unfortunately, that makes it extremely difficult for bookkeeping. I use QB Desktop and track my properties using Classes, but I don't want to have to jump between many separate QB companies to maintain my books. I have a parent company and my LLCs are members of that parent company. My question is - can I maintain all records and books and file taxes at the parent company level and treat my individual LLCs are disregarded entities?

Thank you,

Max

Each EIN should have its own QB file. Few reasons are:
- You will need Balance Sheet by EIN 
- if you have an audit for one EIN then you will open up to all the other companies as one Qb file will share data

Manage your money better to reduce  intercompany transactions. How about a PM company that you will funnel all in one entity and one QB and then at the end of the month enter one entry. 

fyi: it is the Part of doing business 

disclaimer: please consult with your tax adviser and legal team. 
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  • Ashish AcharyaBusiness Member
    CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
    5y
    Originally posted by @Max Brudner:

    Hey all, brand new one here - first post! I've been reading a lot, but can't find the answer to my question. I have two rental properties, building two new ones right now, and have four more lots on which I plan to build either SFRs or 4-plexes. Either way, my portfolio will be growing this year. I'm looking to keep 1-2 residences per LLC to minimize risk - so this will require me to have multiple LLCs. Unfortunately, that makes it extremely difficult for bookkeeping. I use QB Desktop and track my properties using Classes, but I don't want to have to jump between many separate QB companies to maintain my books. I have a parent company and my LLCs are members of that parent company. My question is - can I maintain all records and books and file taxes at the parent company level and treat my individual LLCs are disregarded entities?

    Thank you,

    Max

     Yes, you can track all the disregarded entries and holding company in one file. It’s a bookkeeping issue. One of the ways is to create another class/location and assign holding company to that. Depending how you do it, there will be intercompany transactions and the eliminating entry will be required. 

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  • Max Brudner
    OP
    Member since 2021 · 7 posts · 2 votes
    5y

    @Ashish Acharya

    Thanks Ashish, does this mean I can have my QuickBooks tied to the parent company and simply have multiple levels of classes? For example, ‘disregarded entity: property’.

    0Reply
  • Arthur Neves
    Rental Property Investor · Orlando, FL · Member since 2017 · 56 posts · 33 votes
    4y

    @Max Brudner very good question. I am in a similar situation. Where I have many LLCs for different operations including STR MF and also agent commissions.

    My idea is to hold all these LLCs and have the Holding as the solo member, so at the tax filing , they all can be filed only at the holding level.

    That would also simplify bookkeeping, where I can only do it at the holding level.

    Would this be possible and most importantly prudent?

    Also, what happens if I need to show financials for a individual LLC? Would QBO allow me to pull p&l and balance sheet filtered by class?

    0Reply
  • Kevin Chubet
    Member since 2022 · 32 posts · 19 votes
    4y

    If your state allows it you could just utilize Series LLC's which makes tracking significantly easier. Where I am at in TN allows you to set them up but each LLC has to file its own state return/annual report so it ends up costing a boatload in administration but somewhere like Texas I believe you just file through the holding company. This would be a state dependent piece to look into.

    If they are all Single-Member LLC's you are okay to run them through one QB file because they are disregarded if they are multi-member I would get a separate QB for each LLC because I just went through an audit with a taxpayer and we had to send the QB file and the IRS now indirectly had information on all the other entities which thankfully the auditor we were working with was pretty laid back but it could have been a disaster.

    1Reply
  • Gita FaustBusiness Member
    Accountant · Richboro - Philadelphia, PA · Member since 2008 · 901 posts · 246 votes
    4y
    Quote from @Max Brudner:

    Hey all, brand new one here - first post! I've been reading a lot, but can't find the answer to my question. I have two rental properties, building two new ones right now, and have four more lots on which I plan to build either SFRs or 4-plexes. Either way, my portfolio will be growing this year. I'm looking to keep 1-2 residences per LLC to minimize risk - so this will require me to have multiple LLCs. Unfortunately, that makes it extremely difficult for bookkeeping. I use QB Desktop and track my properties using Classes, but I don't want to have to jump between many separate QB companies to maintain my books. I have a parent company and my LLCs are members of that parent company. My question is - can I maintain all records and books and file taxes at the parent company level and treat my individual LLCs are disregarded entities?

    Thank you,

    Max

    Each EIN should have its own QB file. Few reasons are:
    - You will need Balance Sheet by EIN 
    - if you have an audit for one EIN then you will open up to all the other companies as one Qb file will share data

    Manage your money better to reduce  intercompany transactions. How about a PM company that you will funnel all in one entity and one QB and then at the end of the month enter one entry. 

    fyi: it is the Part of doing business 

    disclaimer: please consult with your tax adviser and legal team. 
    2Reply
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