Discussion:Rental Property Sole Prop Change to LLC
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Discussion Forum Index --> Tax Questions --> Rental Property Sole Prop Change to LLC
| 7 September 2008 | |
| Is there any benefit to switch filing tax return from Sole Prop SCH E to single owner LLC SCH C? Loss in SCH E cannot reduce AGI, but loss in SCH C could. I've heard pros and cons on both, but nothing concise. This is not my specialty, any professional advice greatly appreciated. | |
| 7 September 2008 | |
| my advice would be to refer the client to a tax professional who knows what a Sch E is for and when to file a Sch C. An understanding of LLCs by the tax professional would also be helpful. An understanding of passive activities would also be helpful | |
| 7 September 2008 | |
| simply stated, a passive loss on Sch C would not be allowed, so your misinformation is incorrect | |
ReadMyLips (talk|edits) said: | 8 September 2008 |
| I'm not sure if you think that being a SMLLC would change anything, but it doesn't--a Sch E or Sch C would still be used depending on the classification.
There are a few circumstances when a rental is considered a business, I believe short-term/accomodations where significant services are also provided. But you can't just switch, you need to follow the law and file accordingly. | |
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