Rental LLc Tax Question


N

news

My wife is one of seven owners, of a their inheirited family house,
that they seasonally rent. They have it titled as an LLc.

In doing our personal taxes, I am not sure if of my wife (our) tax
filing status: Passive v Non-Passive.

My wife, along with her siblings, take care of all maintenace issues.
They may use a RE agent to find rental clients, but the family decides
whom to rent. The LLc has an annual net loss of a few thousand $.

If my wife/ Iare subject to AMT taxes, will the tax benefits of the
LLc be "removed".

Thanks for any/ all advise. -dave
 
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L

lotax

Pico Rico says "IRC 469 states that rental activity (not limited to residential property or nonresidential property) is NOT passive activity for a real estate professional."

And that's not entirely accurate either. It depends on the extent of the taxpayer's participation in the activities.

The best thing to do - for this discussion - is to stipulate that none of the seven LLC member-owners is a "real estate professional".
 
L

lotax

And Arthur says "Yet this is a textbook Material participation example, where merely being a person who can decide who the tenants will be is enough for material participation," which is quite wrong, too.
 
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P

Pico Rico

lotax said:
Pico Rico says "IRC 469 states that rental activity (not limited to
residential property or nonresidential property) is NOT passive activity
for a real estate professional."

And that's not entirely accurate either. It depends on the extent of the
taxpayer's participation in the activities.
I concur. However, with the ability to group activities, a Real Estate
Professional has much latitude in meeting the material participation
requirement.
The best thing to do - for this discussion - is to stipulate that none of
the seven LLC member-owners is a "real estate professional".
I totally concur. First replies to OP were assuming facts not in evidence,
failing to state those facts, and drawing conclusions thereon.
 

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