USA New Florida LLC with MFJ; one employed full-time with >$200k income


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Hello all,

My husband and I have started an LLC together (as of 2018) in the state of Florida.

I work full-time with over $200k annual income from my job in Florida.

We started buying real estate for rental income last year. My husband manages the real estate rental properties we own, which are all located in Florida. He does this full-time and we live off my income plus whatever we make from our properties.

Neither of us are real estate professionals.

Being new to this, I am wondering what the smartest route would be to handle our income and taxes. We have purchased each of our properties as husband and wife but wanted to protect ourselves from some of the liability issues, so decided with an LLC.

What we'd like is to be able to file our taxes on our return, but keeping the income/losses from our real estate business separate from my employment income. In the case if our real estate income is a loss in any year, I want to know how to properly report and file our return so we are not disallowed deductions from my employment income.

Questions I have:
1. Should we transfer ownership of each of our properties to the LLC? If so, what is the easiest way to do this (I have no problems with self-filing forms with county/state).
2. What form(s) should we file our rental income with, for the IRS (Schedule C, Schedule E, Partnership, etc.?)?
3. We have not yet applied for an EIN. Should we or are we required to do so, and if so, what filing election should we make?
4. I know the IRS have issues with high-income earners, so what are the issues we need to look out for? I have experienced issues in the past with them and the passive/at-risk limitations? How do we do what we can to avoid audits while maintaining our tax returns using the combined incomes of myself and our business?
5. My husband legitimately spends 100% of his time maintaining our properties, so is nonstop recordkeeping the only way to prove material and active participation, if necessary?
6. If my husband works full-time and I easily spend >100 hours annually on the business, it is still passive income? If not, what would we need to make sure to have to prove this to the IRS, if requested?
7. We don't anticipate having to hire anyone full-time as we will not exceed the number of properties the two of us can handle.
8. If getting a real estate license or other designation would be highly recommended for one or both of us, we would have no problem pursuing it. Is it worth getting if it helps with the tax issues?
9. For the real estate income, do we need to file estimated tax forms and pay this quarterly? So far, our rental income is small compared to my employment income so this has not been required in the past, but we may purchase more so am wondering if this is a change we should anticipate.

Any help or advice would be great...thanks for reading my long thread too!

Carol.
 
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