H&W Real estate LLC

[imjulier]

So jainen enlghtened me in an earlier string that H&W RE LLCs should be reported on a 1065. Last year, one rental property was not yet in an LLC so I reported it on Sch E. Another property was in an LLC but I treated it as a QJV on Sch E. This year, both properties are in LLCs. I'd like to put them both on 1065. How do you do this? I don't need the nuts and bolts of accounting but more need to know how to transfer the assets. Can you simply remove them from their Sch E and put them on the 1065 with the same information for depreciation already claimed, etc? The instructions for QJV act as if you might do this based on qualifying for that treatment but that seems odd. Any insight?

Thanks,

Julie

[North Idaho Rich]

Roll over their individual return and add a 1065 form. The software prompts you if you want to replace the 1040 with the 1065. Answer yes.

Lots of incorrect forms to delete for a partnership return but if the asset transfer is what you want then here you go.

Just tested as I need one in the future and it worked great.

[imjulier]

Rich-

I would have never guessed it could be so easy. I just never would have thought about adding a 1065 to an individual return, its just not in my logical mind to do that. I haven't actually tried it but I will later today. I hope its as easy as it sounds. And this is acceptable per the IRS? I was thinking more along the lines of a section 351 election like for corporate assets. Thanks for the info.

Julie

[North Idaho Rich]

The transfer just moved them. You will still have to do any adjustments necessary manually.

All you are doing is trick the software and save yourself some time.

Remember, it removes the 1040 form only. Your schedule E's, EIC's, etc are still in the return. Many will be need to be deleted as they don't work in a 1065.

[Margaret CPA in OH]

Before changing out the 1040 for a 1065, you could duplicate the original so as not to lose the 1040 info. Then choose which one to use as 1065 and which is individual return.

[North Idaho Rich]

Or just roll it over again...