LLC Formation for Rental Properties

[Rose I.]

This may apply to both short and long-term rentals...but you tell me because I am unclear.

My husband and I are going to buy our first single-family home or townhome and turn it into a short-term Airbnb rental.

We plan to form an LLC as the holding company for all rental properties we will own.

Question 1: Is it necessary to file the LLC separately for tax purposes or can we still include it on the Schedule E form in our joint tax return?

Question 2: My husband will be the investor/owner and I will be the active property manager for the short-term rental (and any long-term rentals in our future). Is it necessary to show that he, as the owner, is paying me, as the property manager, a management fee/salary expense on the Schedule E form? And if so, do I need to fill out a 1099 contractor form or can he simply send it to me and I show that as my income on the joint tax return?

Appreciate any and all answers! :)

Rose

[Michael Porche]

@Rose I. So that is a loaded question and you definitely have options. We operate our rentals the way you are hoping to build them out. I'd recommend talking to a specific CPA real estate investor who does stuff like this as for your guidance. I have a connection if you'd like. I say this because every situation is different and needs more specific answers to get a concise solution

[Basit Siddiqi]

an LLC with more than one owner normally requires the filing of a partnership return.

There is an exception if certain steps are followed for Husband/Wife LLC's formed in community property states.

[Garrett Brown]

I have a really CPA near Dallas if you need one. I am doing something very similar right now and she is walking me through all steps needed. PM if so!