how member of multi-member LLC reports their own expenses for LLC

  • Thread starter removeps-groups
  • Start date

R

removeps-groups

How does member of multi-member LLC reports their own expenses for LLC? This link http://answers.yahoo.com/question/index?qid=20080222075857AAhkpQs says to use Schedule A, which makes the deduction subject to the 2% haircut and AMT. However that seems true if you are an employee of the LLC.

See https://www.accountantforums.com/take-home-office-deduction-partnership-t10075.html.

As an owner you can do it on Schedule E page 2, line 28 with "UPE" in column (a) per the instructions for Schedule E.

What's wrong if one does it in Schedule C? Schedule C has a link to form 8829, so you can easily compute the expenses, and they wind up on page 1 of 1040. By using Schedule E you have to use the worksheet in publication 587, and report other expenses in your own forms, and then only the end number shows up in Schedule E which gets eFiled.

The LLC has business use of home, travel, supplies, etc.

Also, adding the expenses to the owner's capital account just decreases the capital gain when you sell, which makes it a 15% deduction years from now. Whereas when it is deducted as a current expense, it is worth more now.
 
Ad

Advertisements

B

Bill Brown

How does member of multi-member LLC reports their own expenses for LLC?  This linkhttp://answers.yahoo.com/question/index?qid=20080222075857AAhkpQssays to use Schedule A, which makes the deduction subject to the 2% haircut and AMT.  However that seems true if you are an employee of the LLC.

Seehttps://www.accountantforums.com/take-home-office-deduction-partnershi....

As an owner you can do it on Schedule E page 2, line 28 with "UPE" in column (a) per the instructions for Schedule E.

What's wrong if one does it in Schedule C?  Schedule C has a link to form 8829, so you can easily compute the expenses, and they wind up on page 1 of 1040.  By using Schedule E you have to use the worksheet in publication 587, and report other expenses in your own forms, and then only the end number shows up in Schedule E which gets eFiled.
Only that if you do it right, you use Schedule E. Also, to do it
right, there must be an agreement that the members incur these LLC
costs out of their own pockets without reimbursement. It is highly
preferable that this agreement be in writing.

The LLC has business use of home, travel, supplies, etc.
Again, to get an office in home deduction, there must be an agreement
by the members that the specific member you're talking about will
provide his/her own office space.
Also, adding the expenses to the owner's capital account just decreases the capital gain when you sell, which makes it a 15% deduction years from now.  Whereas when it is deducted as a current expense, it is worth more now.
That would be a possible option if the members have not agreed as
above.
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Top