All Forum Posts by: Matt R.

"I would like to know under what circumstances does one file for 8825 vx. Schedule E. "

My schedule E has nothing on page 1 and a a single entry on Part II (page 2). This is the total profit I received from my LLC (which filed a form 1065 and gave me a K-1 statement). So all the income and costs are captured separately in the 1065 and filed for the LLC entity.
Form 8825 is part of the supporting documentation for form 1065 "US Return of Partnership Income".

If I did not have an LLC running things, but it was all personal, then I'd be filling in schedule E page 1 with all the same information.

..and make sure it's all documented so they can't come back later and claim they were mislead.

Hi Ben,
congratulations.
I feel your pain with the financing hoops you have to jump through. I went through similar effort trying to get myself started, I'm sure most folks on BP would have similar stories to tell about our wonderful friends in the banking and lending business 8^)
The first steps are the biggest and the most scary. Having got the first one under your belt you're well on your way to future success.
Best of luck to you, Sir.

"No one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap:"

Tobacco use isn't a protected category
(Neither is poor dress sense, bad hygene, stupidity, or being a Republican 8^)

Check out NOLO's book(s) on Taxes for Landlords - I've found it very valuable for covering this sort of stuff.
One point they mentioned was that a set of repairs could be classified by the IRS as a single improvement project. That would not allow you to treat them as business expenses for this year, but add to your tax basis.
Even if they were indeed separate, because they happen within a short timeframe they could be deemed to be part of one big project.
You need to be careful to document them as separate repairs to the property.
It sounds like this could be difficult due to the size of repairs that were done.

As Charles points out you can definitely split the depreciation and have items like flooring, appliances, window treatments depreciated over a much shorter timespan.

Hi John,
unfortunately, a LLC doesn't save you from paperwork - quite the contrary.
You still need all your receipts to substantiate your expenses to the IRS (if it comes to defending an audit).
You definitely want to have separate accounts to show that the LLC is indeed a distinct entity and you definitely do not want to mix your and the LLC moneys.
Mixing personal and business funds more or less automatically kills the point and benefit of the LLC since it needs to documented as a separate, business entity.

There's a ton of LLC related discussions on BP, plus I found the NOLO books on dealing with Tax for Landlords to be outstanding.
You have plenty of time to ramp up on this aspect.
Get a bunch more rentals under your belt to build up your net worth. Once you get to the point of having enough assets to worry about, paying a lawyer $1k to correctly set up your LLC will be money well spent. And it's a valid business expense 8^)

Hi John,
I'm not a doctor, a lawyer, or a plumber, etc. etc.

You're off to a great start.
Since your assets are basically the rental itself and your own cash, it's unlikely you need an LLC for protection of assets.
An umbrella policy would be a good idea, just to make sure you do have some coverage in case some dorkhead slips and falls on your property. They're not too expensive (the policy, not the dorkhead 8^).
Hopefully, you'll accumulate more in the future and then you can start to think about LLCs when your assets get into 6 figures.

Hi Jon,
you could cash it - just be prepared for some innocent person (and the bank, and the cops) to chase you up asking why you're making unauthorised withdrawls from their account.
The big check comes out of a victim's account - whatever you send back goes to the criminal and they're long gone when the cops are knocking on your door.

No, it's OK - look...

"..overall compensation, which includes stock awards, grew by 6 percent in 2010, according to the report. In the first half of 2010, wages leaped 21.9 percent, partly due to cash bonuses that were awarded in 2009 but paid the following year."

Total compensation GREW by 6%
Phew, I was worried there for a minute. But all's well, they will be able to get the new CL600 with the emu skin interior.

An operating agreement is something that should have been part of your LLC setup.
I'd suggest paying a lawyer to get this done right rather than copy and paste from the web.
Although I hate paying for anything, this is one area that I gladly (..well, not really 8^) prefer to pay for.
If it's not done right, it's worthless and your LLC protection is blown.