Disregarded LLC
Just as a precursor, I am going to have a professional do my taxes. I just like to run them through myself as well to keep up on them.
The question is ... with a 1 member LLC that is used exclusively for rental properties, do I even mention the LLC in my taxes, or will I end up having just my normal 1040 with a Schedule E.
Basically will there be any reference at all to an LLC in my taxes?
kevin
Hey come on people, I can't believe I am the only one out here with a single member LLC that has taxes? Speak up and let me know what you think!!
Kevin
The answer is no. A disregarded entity is just that, disregarded by the IRS for tax purposes. Prepare your Schedule E as if the LLC did not exist.
Wait a second... I have a single member LLC that I use strictly for rentals... I have to include my LLC's bank account number, Fed Tax ID number, etc to my accountant. I have a hard time believing that he doesn't use those numbers - why else would he ask for them?
I'm confused - why wouldn't you report them on your taxes?
[addsig]
A single member LLC can elect to be treated as either a disregarded entity or as a corporation.
If your LLC does not have any employees and has not elected to be treated as a corporation, I don't know why your accountant needs that information.
Does your accountant file a tax return in the name of the LLC? If not, do you see any of that LLC specific information anywhere on your personal 1040?
Perhaps the real answer is that the information is not really used to prepare your tax return, but your accountant just wants all relevant, available information on hand -- just in case.
NewKid - thanks for the reply, much appreciated.
Kevin
NewKidInTown is right. In fact, if you look on the SS-4 Form which is used to apply for the taxpayer I.D. number you will find a section specifically on single member LLCs as disregarded entities. You do not have to obtain a separate taxpayer I.D. number for the LLC as long as it is a sngle member LLC and therefore a disregarded entity.
I would imagine that your CPA requests it as a matter of being through, or you have elected alternate tax reporting as a corporation, etc.
[addsig]
I was under the impression that a single-member LLC still needed to file all rental income on the schedule C. Is this true or is only the E necessary?
The LLC that has elected to be treated as a disregarded entity does not exist as far as the IRS is concerned. Just prepare your personal tax return and Schedule E as if the LLC did not exist.