Report owner distribution for passive rentals on Schedule E?

3 Replies

I own a couple rental properties in a single member LLC. If I need to withdraw some owner's capital, which as far as I understand is not a taxable event, should I report it in Schedule E on tax return? If yes, how do I report it? If not, where should I keep a record of that event in my bookkeeping? Thanks in advance for your suggestions!

@Olivia Piper SMLLCs are considered disregarded entities, meaning the income and expenses are reported directly on Schedule E of your personal tax return. Therefore, there is no balance sheet (where the capital account and distributions would be shown) and no requirement to show those details on your tax return.

As far as bookkeeping goes, you can run those transactions through a distribution account in the general ledger. 

@Olivia Piper

Single Member Limited Liability Company is a disregarded entity, the income/loss items will be reported on schedule E of your individual tax return.

Distributions are not required to be reported on your tax return. However, it should be tracked for basis purposes so you know what your basis is in the LLC.