Rental to LLC


R

Redneck

Clients, husband and wife, own building. Clients have LLC
filing as a partnership. Can the clients lease the building
to the LLC and claim the income on their personal and take
the rental expense on the LLC.
 
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W

Wayne Brasch

Redneck said:
Clients, husband and wife, own building. Clients have LLC
filing as a partnership. Can the clients lease the building
to the LLC and claim the income on their personal and take
the rental expense on the LLC.
If husband and wife are the only partners in the LLC, I
don't see how this could help anything. I say this because
the profit from the LLC goes into their personal return as
does the rental income from the LLC.

Wayne Brasch, CPA, M. S. Taxation
 
J

John H. Fisher

Clients, husband and wife, own building. Clients have LLC
filing as a partnership. Can the clients lease the building
to the LLC and claim the income on their personal and take
the rental expense on the LLC.
no

"Jack" - John H. Fisher - (e-mail address removed)
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=:)
 
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P

Phoebe Roberts, EA

Redneck said:
Clients, husband and wife, own building. Clients have LLC
filing as a partnership. Can the clients lease the building
to the LLC and claim the income on their personal and take
the rental expense on the LLC.
Thereby converting SE income to non-SE income? No, per Code
Sec 162(a)(3), but see Cox v. Commissioner, KTC 1997-272
(8th Cir. 1997). Under the self-rental rules, the income
isn't passive, either.

Phoebe :)
 

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