DIY Taxes W/ BRRRR Strategy

5 Replies

Hey BP -

I’m DYI’ng my taxes this year through TurboTax and am stuck. Here’s some quick info on my situation:

-I have a LLC

- BRRRR'd one house last year

- Using TurboTax to create K-1 for LLC

When entering info into turbo tax, what all do I enter on my K-1 form from the BRRRR process?

Example: Do I enter the purchase and rehab on the K-1 or should I enter that info on my schedule E?

What part of this strategy goes into K-1 and what part goes into my schedule E?

Any informal is greatly appreciated.

Originally posted by @Josiah Cooper :

Hey BP -

I’m DYI’ng my taxes this year through TurboTax and am stuck. Here’s some quick info on my situation:

-I have a LLC

- BRRRR'd one house last year

- Using TurboTax to create K-1 for LLC

When entering info into turbo tax, what all do I enter on my K-1 form from the BRRRR process?

Example: Do I enter the purchase and rehab on the K-1 or should I enter that info on my schedule E?

What part of this strategy goes into K-1 and what part goes into my schedule E?

Any informal is greatly appreciated.



Is this single member LLC? If so you don't have K-1.

If it's a multi member LLC, then you firm have to file a partnership tax return to generate K-1s.

Partnership returns are usually not a DYI project. I see people miss so much deductions from BRRRR that would cover the cost of hiring a tax advisor anyway.

@Ashish Acharya

Thank you for taking the time to respond -

It is a multi member LLC (My wife and I). I started the K-1 process through TurboTax Business. I understand that I have missed the deadline to file my LLC as well.

I have kept good records and shamefully admit I am trying to save money but now realize I may need to some help.

I will DM you.

@John Morgan what you do is OK, because you're in my favorite state of the Lone Star. We're a community property state which allows you to file your LLC taxes as if the LLC was not a separate entity. It is actually considered a single-member LLC and is disregarded for taxes.

@Josiah Cooper does not have this option, because he is married to a completely different woman. :) Actually, it's not about your wives but about your states. Alabama is not a community property state, and the IRS requires a husband-wife LLC in non-community states to file a partnership tax return.

Partnership tax returns are significantly more complicated. You enter everything related to your property and your RE business on the partnership tax return, then the software will create K-1s for you automatically, and then you enter the numbers from these K-1s on your personal tax return. Along the way, there're some pitfalls.

We have not discussed how this property is owned. I have a suspicion that it is owned in your personal names, as opposed to in the name of your LLC. You may not even operate your LLC as an independent entity. In situations like this, it is possible that your accountant will conclude that the property was essentially your personal property and not that of your LLC. Maybe the partnership return is not necessary, after all. However, none of us will be able to make such determination in an online post, as it would be a subject of a much lengthier one-on-one discussion.