All Forum Posts by: Jay Johnson

How is the LLC taxed? Disregarded entity, partnership, S Corp, C Corp??    It is taxed as a partnership.

Who owns the LLC?  My wife and I

Who owned the properties originally?  My wife and I

Were the properties contributed into the LLC or were they sold to the LLC? They were transferred via quit claim

Do you live in a community property state?  The proerties were in Florida

When you filed your individual return, did you have file a form 8582 in prior year returns?  Yes

I'm amazed how so many tax answers are based on who you ask. A situation like this would seemingly be pretty cut and dry. Either the losses should have been taken and since they weren't they go "poof" or even though they weren't taken at the time of transfer, they can be taken when the asset are disposed of. I know people get paid alot of money to decipher the (tax) code but I hate that it is unnecessarily murky. Thanks to those who have replied.

I had several rental properties that had accumulated passive losses. I started a LLC with my wife (2010) but those previous losses were not carried over at the start of the LLC. My accountant at the time said they can just stay on the house until they are sold. My new accountant said the losses should have been taken at the time of the transfer and since it didn't happen, the losses just go away. I need to know who is right and if you have a reference I could read, that would be even better. Thanks in advance.